If you just bought 10 years worth of toilet paper, you may want to check if you still have the receipt.
Late on Thursday, 45,000 striking dockworkers at US East and Gulf coast ports agreed to return to work after port operators sweetened their contract offer, ending a three-day strike that threatened to disrupt the American economy.
The International Longshoremen’s Association and port operators, in a joint statement, said they had reached a tentative agreement on wages and union members would return to work. They said the agreement would extend the prior contract, which expired at the start of this week, through Jan. 15, 2025 while the two sides negotiate on other issues, including automation on the docks.
The breakthrough came after port employers offered a 62% increase in wages over six years, the WSJ reported citing people familiar with the matter. The new offer, up from an earlier proposed raise of 50%, came after the White House privately and publicly pressed the large shipping lines and cargo terminal operators who employ the longshore workers to make a new offer to the union.
The agreement ends a strike that had closed container ports from Maine to Texas and threatened to disrupt everything from the supply of bananas in supermarkets to the flow of cars through America’s factories, and cost the US economy billions each day in lost commerce.
The latest offer would raise the base hourly rate for ILA port workers to $63 from $39 over six years. One of the people said the offer is being made on the condition that dockworkers go back to work and agree to efficiency gains.
The offer is less than the union demand for an increase of 77% over the term of the contract but a far larger increase than most major labor contracts, including a contract reached last year covering the separate union representing West Coast longshore workers. Many U.S. dockworkers currently earn more than a $100,000 a year, with baseline hourly wages boosted by work rules and overtime requirements.
The strike came about five weeks from a presidential election where both main candidates are wooing working-class union voters. Both Vice President Kamala Harris and former President Donald Trump have voiced support for the workers, stressing that the carriers are mostly foreign-owned.
Top White House aides have been in frequent contact with the employers, reiterating that Biden doesn’t plan to use his federal power to break the strike. “This is the first strike in 50 years—these people know how to get to yes,” Secretary of Agriculture Tom Vilsack said Thursday, speaking to reporters aboard Air Force One. “They just need to get to yes.”
The walkout had shut down some of the country’s main gateways for imports of food, vehicles, heavy machinery, construction materials, chemicals, furniture, clothes and toys. Many manufacturers and big retailers, with their busy fall shopping season just starting to kick in, said they could withstand a short strike because they brought in products earlier than usual this year and diverted other cargoes to West Coast ports. But executives said a walkout lasting a week or longer would push up shipping costs and might trigger product shortages.
The International Longshoremen’s Association said it had agreed to extend the contract until Jan. 15 and work will resume.
Container ports from Houston to Miami and up to Boston have been closed since the labor contract between the ILA and the US Maritime Alliance, which represents terminal operators and shipping lines, expired on Tuesday.
Dozens of ships carrying containers and autos have anchored off the coast of major trade hubs including New York, South Carolina and Virgina over the past few days.
It remains to be seen if other US labor union will also go on strike hoping to repeat the staggering wage gains that were just handed to the Longshoremen. If so, watch as the color drains out of Powell’s face as wage inflation hits double digits in the coming months.
Tyler Durden
Thu, 10/03/2024 – 19:22
