Dockworkers Union Agrees to Suspend Strike

The ILA port strike is an example to all of America's workers that when you stand up and force greedy corporations to share the wealth, you will win. pic.twitter.com/ODrOEfNWJI

— Teamsters (@Teamsters) October 4, 2024

The International Longshoremen’s Association has agreed to suspend a strike that closed down major ports on the East and Gulf Coasts. The move followed an improved wage offer from port employers. The strike, which the dockworkers’ union began on Tuesday, threatened to weigh on the economy five weeks before national elections.

Port of Los Angeles Executive Director Gene Seroka joins @thebradsmith on @YahooFinance to share his perspective on the ILA dockworker strike currently affecting East and Gulf ports. https://t.co/CeIwAXiZoo pic.twitter.com/d96BltDIyi

— Port of Los Angeles (@PortofLA) October 1, 2024

Employers, represented by the United States Maritime Alliance, have offered to increase wages by 62 percent over the course of a new six-year contract, according to a person familiar with negotiations who did not want to be identified because the talks were continuing. In a statement, the union said that it had reached “a tentative agreement on wages” and that its 45,000 members would go back to work, with the current contract extended until Jan. 15.

Ivey's Fraser Johnson spoke to @CBCNews about the US port strike saying Canadians might see shortages of products including fruits and vegetables over the next few days, and other consumer goods, clothes, electronics and automobiles if it goes on longer. https://t.co/eops5F64eX

— Ivey Business School (@iveybusiness) October 2, 2024

The union said it was returning to the bargaining table “to negotiate all other outstanding issues.” The alliance issued a similar statement. The agreement came after the White House pressed both sides to reach a deal to end the strike, the union’s first full-scale walkout since 1977. The wage increase is a clear victory for the I.L.A. and its leadership.

Dockworkers settle for improved wages

President Biden, when asked about the tentative deal on Thursday evening, said: “We’ve been working hard on it. With the grace of God, it’s going to hold.”

A 62 percent increase would raise the top longshoremen’s wage to just over $63 per hour at the end of a new six-year contract, from today’s $39 per hour.

At $63 an hour, the wages of East and Gulf Coast longshoremen would slightly exceed those that will be earned by West Coast longshoremen, who belong to a different union, at the end of their contract in 2027. The strike could have exacerbated inflation just as it appeared to be cooling down from its mid-2022 peak. The maritime association had proposed significant wage raises, while the union demanded larger increases and guarantees against automation.

Short-term price spikes were likely if the strike persisted. Some of the main industries facing challenges included coal, energy, and agricultural products. Manufacturers of trucks, toys, and artificial Christmas trees also experienced obstacles due to disruptions at major Eastern container and cargo ports.

While short-term disruptions were expected, the long-term economic impact would have largely depended on the duration of the strike and the effectiveness of any mitigating strategies. The Federal Reserve’s decision-making could have been complicated by the strike, as strike-induced inflationary pressures might have added a layer of uncertainty.