Here unveils the list of victors in the port strike agreement.
The agreement solely pertains to wages, disregarding other contract stipulations. The union consented to resume work on Friday, concluding a three-day pause, while discussions on topics such as enhanced automation and technological integration continue.
This wage agreement served to halt what could have escalated into one of the most disruptive strikes in U.S. history, had it persisted for several weeks or months. The strike had the potential to disrupt import and export activities across numerous ports, leading to severe consequences if prolonged.
The Workers
The International Longshoremen's Association members predominantly emerged as the primary beneficiaries. They will receive an immediate wage hike of $4 per hour, in addition to their current highest pay of $39 per hour. This translates to a substantial increase of over 10%.
Furthermore, they will earn an annual $4-an-hour raise throughout the six-year contract, accumulating $24 in increased wages. This will lead to a substantial increment of 62% in their pay, without suffering substantial salary deductions. Unlike many unions, the ILA did not provide strike benefits for its members to assist them during this period.
Despite not achieving the 77% increase initially sought, the deal surpassed the initial management proposals of 22%, 40%, and less than 50% wage increases throughout the contract's duration.
Harold Daggett
Prior to the strike, few outside the U.S. labor movement or shipping community were familiar with ILA President Harold Daggett. However, by the week's end, his brazen approach gained him national recognition and an audience in both of these circles.
He employed colorful language, laced with profanity, and made strident declarations, such as stating his readiness to induce a worldwide economic collapse to secure the demands of his union members. These tactics worked in winning approval.
Daggett capitalized on the substantial profits reported by shipping lines since the pandemic commenced, as well as the unwavering commitment of ILA members to work throughout the pandemic to ensure consumer and business needs were met. His strategy proved successful.
However, not all attention was favorable. Staunch criticism was sparked by his considerable annual salary of nearly $1 million, exceeding that of many union leaders. Additionally, past allegations of ties to organized crime resurfaced, which Daggett vehemently denies and successfully defended against in a 2005 federal RICO case. Furthermore, Daggett suggested he faced death threats and harassment as attempts to undermine his position at the bargaining table.
Controversy notwithstanding, Daggett probably appreciated the publicity gained by the union and its members, along with the record profits reported by foreign-owned shipping lines, according to Dr. Sal Mercogliano, a maritime historian and an associate history professor at Campbell University.
Impressed by the leverage possessed by the ILA, Mercogliano said Daggett managed to keep all local unions united along the two coastlines. This was far from a given during the negotiation process, as Mercogliano had predicted less unanimity among the locals a year ago.
Businesses and Consumers
The swift resolution to the strike, allowing for the East and Gulf Coast ports to resume operations in a timely manner, can only be considered a positive outcome for businesses transporting goods and consumers purchasing them.
The National Retail Federation praised the decision to end the strike, urging both unions and shipping alliances to collaborate diligently in good faith to ensure a fair and final agreement. Shortages could have resulted in increased prices for various products, as demonstrated by the congestion at West Coast ports after the pandemic, which contributed to higher prices from 2021 onward.
The Biden Administration
Calls for President Joe Biden to invoke his authority under the Taft-Hartley Act to compel ILA members to return to work for a 90-day "cooling off" period were made. This action would have diminished the union's bargaining power, although not entirely, as Daggett clarified to members so they would remain paid during this period, allowing them to process only a fraction of their normally handled cargo.
Despite the calls, Biden opted against intervention. Publicly, he and other administration members affirmed their support for a deal rewarding union members for their contributions to record profitability by foreign-owned shipping lines. Alternatively, a prolonged strike leading to significant economic disruptions, consumer shortages, factory shutdowns, and explosive public demands to act in a way hostile to the Democrats' labor supporters would have been detrimental.
Biden's decision to prioritize preventing a major economic crisis in the country earned him gratitude, according to Acting Labor Secretary Julie Su, who facilitated the wage agreement in New Jersey.
The Shipping Lines
Despite the appearance of contrary, shipping lines also reaped benefits from the territorially rapid agreement. A swift resolution is advantageous for an industry currently enjoying high profitability. In just three days, the strike impeded 5% of the global container capacity, but after a week, the disruption would have escalated to 10% and beyond.
"As far as the shipping companies are concerned, this isn't a major setback if they're still earning profits," mentioned Mercogliano.
This wasn't the scenario the United States Maritime Alliance, the body that represents ship lines, terminal operators, and ports, had hoped for. However, it was the best they could manage after the Biden administration made it clear they wouldn't be intervening. Mercogliano assumes the Biden administration applied more pressure on the USMX, commonly referred to as the group, than the union itself.
According to Mercogliano, the Biden administration held significant influence over the maritime alliance. He stated that the USMX was confronted with a term they dread - 'antitrust'. This implied that the administration might have contemplated taking action against the collaboration between shipping companies.
The business sector and consumers greatly benefited from the swift resolution of the strike, as the disruption to import and export activities would have led to increased prices and potential shortages. This settlement allowed the East and Gulf Coast ports to resume operations, preventing a significant economic crisis.
Harold Daggett, the ILA President, leveraged the substantial profits reported by shipping lines and the commitment of ILA members to secure favorable contract terms, despite facing criticism for his salary and past allegations.
