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A U.S. dockworkers’ strike took place this week, halting operations at major East Coast and Gulf Coast ports. Over 45,000 members of the International Longshoremen’s Association (ILA) were striking for better wages and protection against automation, putting an estimated 68% of U.S. imports at risk. The strike, which impacted 36 ports from Maine to Texas, could have cost the U.S. economy between $4.5 billion and $7.5 billion per week if continued, according to Oxford Economics.
President Joe Biden had urged both sides to reach a swift deal, warning of the potential economic fallout. The strike came at a delicate time, with inflation finally showing signs of cooling after two years of high interest rates from the Federal Reserve. Analysts fear that continued disruptions could push inflation back up, as seen in previous dock worker strikes like the one in 1977, which contributed to a 0.5% rise in inflation rates that November.
After a three-day walkout, the International Longshoremen’s Association and U.S. Maritime Alliance reached a tentative agreement on wages Thursday and extended their existing labor contract until Jan. 15, suspending their strike for now to allow more time to negotiate a new contract.
Negotiations stalled after the U.S. Maritime Alliance (USMX) offered a 50% wage hike over six years, far below the ILA’s demand for a 77% raise. The dispute was further complicated by calls to limit automation in port operations, with workers seeking guarantees that jobs would not be replaced by machines. The tentative agreement would increase workers’ wages by 62% over the life of the 6-year contract, bringing the hourly wage for a top dockworker to $63 per hour at the end of the new contract, up from $39 per hour under the expired contract.
If continued, the strike could have worsened supply chain issues ahead of the busy holiday season and jeopardized U.S. economic recovery. Although Biden has the authority under the Taft-Hartley Act to order workers back on the job, he avoided intervening, maintaining his pro-union stance. However, with increasing pressure from industries and concerns over inflation, the administration’s role could have changed if the standoff continued.
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