Nicholas Wealth Management CEO David Nicholas explains how a port strike could affect the stock market and the economy as a whole in ‘Varney & Co.’
Ship workers at several US ports went on strike Tuesday for the first time in nearly 50 years for better wages and automation.
Experts say that ending the work stoppage will require managers, policy makers and workers to develop a solution that ensures efficiency and job security.
“The solution to the East Coast port strike will depend on solving the balance between the labor needs and the increasing pressure of automation,” Richie Daigle, supply chain evangelist at Tive, told FOX Business. He added that the challenge is “determining how ports will integrate advanced technology without laying off workers.”
Former National Labor Relations Board agent and chief executive officer Jason Greer agrees, telling FOX Business that ports must use automation to some degree to ensure their survival.
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The cargo ship AS Savanna enters Port Miami on April 29, 2020, in Florida. (Joe Raedle/Getty Images)
Who comes to the table next will come down to “which side is facing political pressure,” Gerer said.
Americans must prepare for long port strikes lasting at least three to four months, he said. Meanwhile, some experts predict that this will only last a week before the government intervenes.
In part, the International Longshoremen’s Association (ILA), which negotiates on behalf of 45,000 longshoremen in twelve US ports that manage almost half of the country’s ocean waters, is asking for a 77% wage increase, which Greer believes is “economically feasible.”
Greer, president of Greer Consulting Inc., said he’s never seen salary demands as high as they are now.
The US Maritime Alliance (USMX), which represents port workers, has increased its proposal to raise wages by 50% over six years. The union also pledged to put limits on automation, a commitment Gerer believes is failing from the union’s perspective.
A container ship departs the Port of Newark in Elizabeth, New Jersey, on September 30, 2024. (Michael Nagle/Bloomberg via/Getty Images)
“This is not just about money, this is about them making a statement because they want the country to know that the maritime union is strong, united and most importantly, that you need it more than we need it. you,” said Gerer.
Still, a 50% salary increase is rare, Greer said.
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If the union had its way, Gerer believes they would try to extend the strike to five to six months. But he thinks it’s more likely that President Biden will step in and implement the Taft-Harley Act, which begins an 80-day “cooling off” period between unions and companies when workers return to work.
Brian Pacula, a partner in West Monroe’s Operations Excellence practice, believes it will only take one week for the government to intervene as there is so much at stake in the economy. From there, he estimated it could take another two weeks of negotiations before the two sides reach an agreement.
Aerial view of containers and cargo ships at the Port of Los Angeles on Jan. 19, 2022, in San Pedro, California. (Qian Weizhong/VCG via/Getty Images)
However, the Biden administration has already signaled that it has no plans to intervene.
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“We support collective bargaining and we believe it’s the best way for American workers and employers to come to an agreement,” a Biden administration official told FOX Business earlier. “That’s why we encourage all parties to sit at the negotiating table and negotiate honestly.”