The dockworkers' union has agreed to return to work after the White House intervened and strong-armed the U.S. Maritime Alliance, representing shipping companies, to give the union what they wanted regarding wages.
The dockworkers will return to work immediately under the old contract and the two sides will have until January 15 to hammer out the outstanding issues.
Why Biden didn't intervene to prevent the strike is clear. He wanted the International Longshoreman Union (ILA) to demonstrate its muscle and willingness to shut down the U.S. economy to get what it wanted.
The union wanted a 77% increase in wages. After the companies offered 50%, they got a 62% increase after White House aides, including chief of staff Jeff Zients and other senior officials, held a Zoom meeting with the shipping lines at 5:30 a.m. (Good morning. Did I wake you? Sign here.) Meanwhile, acting Secretary of Labor Julie Su visited union leaders in New Jersey, urging them to get on board.
“Collective bargaining works, and it is critical to building a stronger economy from the middle out and the bottom up,” President Joe Biden said in a statement after the deal was announced.
ILA President, the bomb-throwing Harold Daggett, claimed the dockworkers deserved a "fair share" of the "hundreds of billions of dollars in profits that shipping companies made." That's not even in the ballpark as far as profits made during the pandemic, considering what the companies had to do to get the merchandise from point to point around the world.
And as far as a "fair share" for the union, there are around 50,000 ILA members but only 25,000 jobs. The other half of the union draws "container royalties." The "royalties" were negotiated in a previous contract and were intended to protect union members from job losses due to automation.
Now the union is demanding no automation at all. We'll see how that works out, as automation is the primary issue left to be negotiated before the January 15 deadline.
What has this enormous power over the docks given the ILA? The Wall Street Journal quotes the 2019-2020 report from the Waterfront Commission of New York Harbor, which gave a stark, unforgiving picture of the ILA's domination of the ports.
“The absolute control of the International Longshoremen’s Association, AFL-CIO (ILA) over hiring in the Port for over 60 years has not only led to a lack of diversity and inclusion in waterfront employment, but also to the perpetuation of criminality and corruption.”
The report also mentioned that "those who are connected to union leadership or organized crime figures are rewarded with high paying, low-show or no-work special compensation packages."
This is how ILA boss Harold Daggett earns $900,000 a year, drives a Bentley and owns a 76-foot yacht. And this is the union that President Biden, Kamala Harris and “national conservative” intellectuals extol as tribunes of the working class. Why hasn’t Mr. Biden rung up these guys for “systemic racism”?
This is what happens when unions are granted monopoly negotiating power that lets them extort outsized rents. The ILA is the sole union bargainer for East and Gulf Coast ports, and there is little non-union port competition. The union has a chokehold on commerce that gives it extortionary leverage.
The working-class heroes of the ILA may not be finished holding the economy hostage. Unless the Maritime Alliance gives in and delays or scraps modernization plans, U.S. ports will fall further behind the rest of the world's port operations.
All the union's actions have done is increase shipping costs substantially, which hurts millions of small businesses.
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