I am a simple lab’ring man
And I work along the shore,
For to keep the hungry wolves away
From the poor longshoreman’s door.
I toil all day long in the broiling sun
On the ships that come in from the sea,
From early light until late at night
For the poor man’s family.
Then it’s give us good pay
For every day
For that’s all we ask of thee,
For our cause is right
And we’re out on a strike
For the poor man’s family.
The Longshoreman’s Strike, by Edward Harrigan (1875)
Three Day Strike
Dockworkers on the East and Gulf Coasts went on strike on Tuesday. This marked the first major work stoppage by the International Longshoremen’s Association (ILA) since 1977. It halted about half the nation’s ocean shipping imports and affected 36 ports from Maine to Texas.
Bananas, socks, automobiles, booze, electronics, Christmas goodies, and everything in between. The disruption would have cost the economy billions of dollars per day, upset supply chains, and pushed up consumer prices.
But after three days a tentative deal was reached. Late on Thursday, the strike came to a quick end. Workers who’d walked off the job on Tuesday agreed to return. Now they have a three-day backlog to work through.
The ILA union, which represents 45,000 port workers, had been negotiating with the United States Maritime Alliance (USMX) employer group for a new six-year contract. The current contract had expired at midnight September 30. Now it is being extended through January 15, 2025, while the ILA and USMX hash out the details of the new contract.
At the heart of the matter is wages. The ILA wants a “fair contract” that includes 77 percent wage increases. The USMX offered to hike wages by 50 percent. The ILA initially told them to pound sand. Then three days into the strike the USMX offered a 62 percent wage increase. That was enough for the ILA to call off the strike and for workers to return to their posts.
The other area of dispute was with respect to automation. The USMX wants to modernize the docks. The ILA sees this as a threat to jobs. Port worker Daniel May offered the following analysis:
“Automation over our nation’s ports should be a concern for everyone. The truth is, robots do not pay taxes, they do not spend money in their communities. The ILA will continue to fight until its members receive the contract they deserve.”
Details as to how the tentative agreement will address automation are unclear. But we suppose the ILA will get its way and automation will be completely banned.
Loss of Purchasing Power
Mr. May is right. Robots do not pay taxes or spend money. But he misses the point. More efficient port operations would result in lower prices for imported consumer goods.
While automation would reduce the number of longshoremen jobs, it would benefit everyone else. Certainly, as prices have skyrocketed over the last four years, some cost relief for consumers – that’s you – would be nice.
The ILA, of course, is looking out for the best interests of its members; not everyday consumers. Wage earners, including longshoremen, have seen the purchasing power of their earnings significantly eroded over the last four years.
In fact, per the government’s own CPI reports, consumer prices have jumped 22 percent since March 2020. In reality, prices for many goods have doubled or more. Have you bought an onion lately?
The loss of purchasing power is a direct result of all the money printing and deficit spending that the U.S. Treasury, working hand in glove with the Federal Reserve, have wrought. The real culprit, however, is Congress, which refuses to rein in spending. East and Gulf Coast port workers had to demand more to offset the watered down dollars they’re being paid:
“Pay for longshoremen is based on their years of experience. Under the ILA’s former contract with USMX, which expired on Monday, starting pay for dockworkers was $20 per hour. That rose to $24.75 per hour after two years on the job and to $31.90 after three years, topping out at $39 for workers with at least six years of service.
“The union [was] demanding a 77 percent raise over six years, or the equivalent of a $5 increase per hour for each year of the contract. Under the union’s proposal, workers would make $44 for the first year of the contract, $49 for the second and up to $69 in its final year.”
Under the tentative agreement, the base hourly rate for ILA port workers would increase from $39 per hour to $63 per hour over six years.
As far as strikes go, this was over before it started. Some ILA strikes, however, have been long and violent.
Bloody Thursday
When Harry Bridges and the ILA shut down West Coast ports from Seattle to San Diego in 1934 the strike lasted for 83 days. At the time, longshoremen wanted a wage of $1 an hour, a six-hour day, and a 30-hour work week. That was back when a dollar was still worth something – though not nearly as much as just one year before.
The Roosevelt administration made several attempts to cut a deal to end the strike. The ILA rejected the proposals.
After a peaceful 4th of July in 1934, things turned ugly on Bloody Thursday July 5th. San Francisco police charged 2,000 strikers who were picketing Pier 38. They drove them away after several hours of fighting.
The fight resumed in the afternoon as police attempted to disperse 5,000 strikers from Rincon Hill. The police shot tear gas cannisters and swung billy clubs. The strikers threw bricks.
The violence then escalated outside of the ILA kitchen. According to witnesses, a group of strikers surrounded a police car and attempted to tip it over. The police responded by firing shotguns at the sky and revolvers at the crowd.
Three men in the intersection of Steuart Street and Mission Street near the Embarcadero blocked the bullets with their bodies. Howard Sperry, a striking longshoreman, and Nick Bordoise, a volunteer cook at the ILA mess hall, both died. Charles Olsen was also shot but lived to tell about it.
The strike came to an end on July 31. The ILA membership, over Bridges’ strong objections, voted to accept arbitration to end the strike. Bridges, a member of the Communist Party, continued in union leadership for another 45 years.
He’s been immortalized with statutes at public universities and parks and plazas are named in his honor at port cities along the West Coast.
The Ghost of Harry Bridges
There’s no coincidence that the first ILA strike since 1977 happened now. The 1970s, like the 2020s, were a decade of rampant consumer price inflation. Wage earners saw the purchasing power of their take home pay get cut in half.
Similarly, the 1934 ILA strike came a year after Roosevelt confiscated gold from U.S. citizens and devalued the dollar by 59 percent.
Given the current trajectory of deficit spending, which is propelling the rate of consumption well above the rate of production, consumer prices will continue to inflate for years to come. If ILA President Daggett’s goal is to keep wages ahead of inflation, the tentative agreement for a 62 percent wage increase over six years is not nearly enough.
At the same time, these wage increases will contribute to the inflation problem. Increasing wages and banning automation will result in higher operational costs at ports. This will inflate the price of imported consumer goods. Tariffs and other protectionist measures will too.
The inflation of consumer prices will not stop until the mega deficits stop. But instead of getting a grip on spending, Congress is relying on money games by the Fed to keep the debt flowing.
Financial repression, through Fed rate cuts, is being employed so Washington can more readily finance its debts. By artificially suppressing interest rates government debt burdens can be reduced over time via inflation. Consequently, this robs savers and wage earners through the inflation tax.
This, in essence, is why nothing seems to be working for low-and-middle-income American families these days. Working harder and more hours still results in a reduced standard of living.
ILA workers making $20 an hour know this firsthand. They’re just mistaken on who they should be directing their rage towards. Perhaps USMX isn’t really the bad guy after all.
Regardless, the ghost of Harry Bridges returned this week to America’s shores. The docks went quiet. No ships came in. And after three short days the ILA got – mostly – what it wanted.
Consumers, in return, will be rewarded with higher prices.
[Editor’s note: Have you ever heard of Henry Ford’s dream city of the South? Chances are you haven’t. That’s why I’ve recently published an important special report called, “Utility Payment Wealth – Profit from Henry Ford’s Dream City Business Model.” If discovering how this little-known aspect of American history can make you rich is of interest to you, then I encourage you to pick up a copy. It will cost you less than a penny.]
Sincerely,
MN Gordon
for Economic Prism
