What Houstonians Need To Know About Recent Port Strikes

The International Longshoremen Association (ILA) is the largest union of maritime workers in North America, representing nearly 85,000 individuals. After the expiry of their contract with the US Maritime Alliance at the beginning of October, the union committed to a nation-wide strike in order to lobby for increased wages and against further automation of the ports. Across both the East and Gulf coasts, ports ceased to function as dock workers left their posts and joined the picket lines for the first time since 1977. While the average consumer would not feel the impact of the strike immediately, a strike of this magnitude lasting for multiple weeks could cause national supply chain disruptions, leading to price surges or shortages of imported goods.

The potential for a work stoppage to affect the supply chain, especially during the holiday season, has led some politicians in particular to call on President Biden to invoke a 1940s law that would force the union workers back to the ports for 80 days. In response, Biden refused to levy the legislation against the union, emphasizing the importance of collective bargaining. This move so far appears to have worked out since after three days of striking, a temporary agreement has been reached to reopen the ports.

The Temporary Resolution

While a new contract has not been officially signed between the ILA and the Maritime Alliance, a deal was brokered between the two parties to continue bargaining while union members return to work. The union representatives initially requested several changes to the proposed 6 year contract including a 77% pay increase over the next 6 years, and a ban on automated port systems that threaten to put union members out of work. The union previously rejected a counter offer for a 50% pay increase arguing that this suggestion would not cover the costs of recent inflation, and that the industry profits had grown substantially from hundreds of millions to billions of dollars annually. On October 3rd however, both parties agreed to a temporary solution to extend the master contract until January 15th 2025 while they return to the bargaining table to negotiate further on outstanding issues. The current agreement includes a 62% wage increase over the next 6 years, but the parties are still deliberating on how far protections for job security against automation will go. If a permanent resolution is not found by January 15th, it is possible that the strike will resume.

How Would A Strike Affect Houston?

Along with over 30 additional ports across the country, several hundred workers at the Port of Houston joined the strike on October 1st, and if a permanent agreement is not made by January, the city will certainly feel the effect of the strike once more. With the Houston ship channel contributing nearly $440 billion to the state economy and supporting an estimated 1.5 million jobs, the local economy would take a hit from an extended strike. It is estimated that local economies could experience as much as a billion dollars in losses each day from a work stoppage. Shipments being rerouted to the West coast would create noticeable shortages in perishable goods like fruits and vegetables within a week. There would also likely be an increase in the price of imported consumer goods in the event of a prolonged strike. While shortages would have an effect on imported goods, supplies of domestically produced products such as toilet paper would remain unaffected.