1) Management wants to cut workers’ pay. The largest sticking point in the negotiations between the port workers and a coalition of companies known as the United States Maritime Alliance (USMX) is a payment to workers for each container they unload. Instituted in the 1960s, the payments are meant as compensation for the mechanization of America’s ports, which allows one worker today to do what used to take three workers. As the New York Times explained, “The companies want to freeze those payments for current longshoremen and eliminate them for future hires.” The companies also want to cut future raises for workers to below the rate of inflation.
2) Port workers are highly skilled. The companies claim that workers are paid too much, rendering east coast ports uncompetitive. But the workers — whose numbers have dropped from 35,000 to 3,500 due to automation — are highly trained and “cannot be easily replaced.” They also do not work consistent hours. According to the union, “longshore labor cost amounts to between 3% and 4% of the shipper’s total cost.”
3) The economic impact could be significant…or not. As Brad Plumer explained in the Washington Post, it’s hard to figure out the economic impact of port closures. Estimates place the impact of a 2002 West Coast port closure at $1 billion per day, but the cost may have actually been far less than that.
4) Businesses are using political pressure to entice workers to cave. Business leaders and right-wing governors are urging the White House to invoke special powers to end the strike, should workers walk out. President Obama, for his part, urged the two sides to forge an agreement “as quickly as possible.”
The strike would be the first at East Coast ports since 1977.
The two sides report that they have reached a tentative agreement to avert a strike.