Looming dockworkers’ strike threatens to increase prices, product shortages

Thousands of East and Gulf coast dockworkers are preparing to strike next week before their contract expiration date — a strike that could cost the U.S. economy billions and increase prices.

If they cannot reach a tentative contract, more than 25,000 members of the International Longshoremen’s Association could walk off the job on the morning of Oct. 1. The strike, the first since 1977, could spell doom for the economy ahead of the holiday season and the U.S. presidential election.

The ILA and the United States Maritime Alliance have been in heated negotiations for months but have made no significant progress. The union’s initial demands included a 77% wage hike to the current $39-an-hour base wage, increased benefits and a complete ban on automated cranes and gates.

The ILA suspended contract negotiations with USMX in June, saying the organization’s last offer violated its current contract. USMX followed with a contract offer in August, providing a significant pay increase, but it was rejected by the union.

Earlier this week, USMX filed an unfair labor practice charge with the National Labor Relations Board, calling on the regulator to force the union to return to the bargaining table.

If a strike does happen, certain estimates project that a work stoppage across 14 ports could cost the U.S. economy around $5 billion a day. Even if the strike lifted after a few days, it would take several more days to get the ports moving again.

The work stoppage will greatly decrease the flow of goods and increase shipping cost, which will be passed down to consumers. Fresh produce, auto parts, construction materials and consumer electronics are just some of the products that could see a significant price hike if a strike happens next week.

Transport and warehouse workers could also find themselves temporarily out of the job if the strike persists longer than a few days.

The strike presents a difficult situation for President Biden who, under the 1947 Taft-Hartley Act, can stop a strike before it starts. If the president does decide to avert the dockworkers’ strike, it could hurt his image as “the most pro-union president” in history. Still, business groups have called on Mr. Biden to step in and prevent a supply chain disaster.