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MichAuto: Economic Impact of the International Longshoremen Association Strike

October 1, 2024

Following failed negotiations, longshoremen throughout most of the eastern and southern U.S. began a strike on Oct. 1, marking the first dockworkers’ strike since 1977.

The Current Situation

The International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) are currently far apart in negotiations. USMX has proposed a 40% wage increase over six years, starting from $39 per hour, while the ILA is pushing for a 77% wage increase and continued reductions in port automation.

The strike will impact 25,000 jobs across three dozen facilities at 14 port authorities along the East and Gulf Coasts.

West Coast ports will not be impacted as they are part of the International Longshore and Warehouse Union (ILWU), which has had a collective bargaining agreement in place since 2022.

The White House has stated that it will not use its executive powers under the Taft-Hartley Act to halt the strike. Instead, the administration encourages both sides to remain at the bargaining table and negotiate in good faith. Senior officials from the White House, Labor Department, and Transportation Department are in direct communication with both the union and USMX to facilitate a resolution.

What’s at Stake

The Anderson Economic Group, based in East Lansing, estimates the economic impact of the strike will be $2.1 billion in the first week, largely due to the lost value of perishable goods. Other estimates suggest the economic toll could range from $1 billion to $5 billion per day, depending on the length of the strike. If the strike continues, these costs are expected to increase significantly.

The strike will primarily affect perishable products like produce, as well as beer, wine, and liquor. Also, manufactured goods such as furniture, automobiles, and appliances will likely experience delays. The strike’s duration will determine the extent of product shortages and impact logistic-sensitive businesses across the Detroit Region.

MichAuto Perspective

 

MichAuto urges a quick resolution to this strike and aligns with the U.S. Chamber’s call for President Biden to invoke the Taft-Hartley Act as a possible means to ensure the continued flow of trade should parties fail to negotiate. With billions on the line and the potential to cripple supply chains within the strike’s first week, a prompt resolution is critical.