East and Gulf Coast dockworkers set to strike after rejecting 'insulting' wage offers

Dockworkers at East and Gulf Coast ports are set to go on strike after their contract expires at midnight on Monday as they seek higher pay and better job protections, in what would be the first coordinated walkout at ports from Maine to Texas since 1977.

The International Longshoremen's Association (ILA), a union, has reached an impasse with the United States Maritime Alliance (USMX), the port operators' group, over pay rises and protection against automation of jobs, among other benefits.

The strike is expected to have consequences across the economy: East and Gulf Coast ports bring in about half of the country's containerized goods and send out about two-thirds of them.

President Joe Biden doesn't plan to intervene to force a deal, administration officials have said, following pressure from union officials and advocates who want to ensure the dockworkers keep their right to strike.

An ILA statement on Sunday said USMX "refuses to address a half-century of wage subjugation," and another earlier in the week referred to the wages the port operators were offering as "insulting" and "a joke."

The expiring contract covers 45,000 longshoremen at about three dozen ports, including the Port of New York and New Jersey, which is the third busiest in the country.

The last strike at all of the East and Gulf Coast ports was in 1977; containerized trade is now even more essential to the U.S. economy than it was then.

West Coast dockworkers are covered under a different contract that was reached last year after many months of acrimonious negotiations.

The U.S. president has the authority to suspend a dockworkers strike under the Taft-Hartley Act, anti-union legislation passed in 1947. Presidents Richard Nixon and George W. Bush both used the act to break dockworkers strikes.

Union officials are watching the Biden administration closely in the current labor dispute. AFL-CIO President Elizabeth Shuler last week implored Congress to stay out of the process, warning that even the suggestion of federal intervention could prevent USMX from negotiating in good faith.

"Averting a strike is the responsibility of the employers who refuse to offer ILA members a contract that reflects the dignity and value of their labor," Schuler wrote.

Biden, a Democrat, angered many union members and working class advocates in 2022 by working with Congress to intervene to stop a major railworkers strike.

Some experts believe the president won't want to do that again ahead of the November election, for fear of hurting Democratic turnout.

"They just don't want to have a fight with labor going into the election," Harry Katz, an economist and labor relations expert at Cornell University, toldThe New York Times. "Because you need the unions to get out the vote."

However, the administration will also likely face pressure from certain Democrats and business interests who worry about the economic impact of a strike just before the elections. JPMorgan analysts estimated that the strike would cost the U.S. economy about $5 billion per day, roughly 6% of gross domestic product.

"There is little chance that the administration would risk jeopardizing its recent economic successes less than two months before a tightly-contested election," Bradley Saunders, an economist at Capital Economics, wrote in a note to clients last week, according toThe Washington Post.

The ILA and USMX are negotiating pay increases, healthcare benefits, and the use of automated or semi-automated terminals, which threaten jobs. Pay has reportedly emerged as a central point of contention in recent negotiations. USMX offered an hourly pay rise of $2.50 each year over the course of a six-year contract; the ILA asked for a $5 raise per year, the Times reported.

The current top pay rate for the 45,000 longshoremen is $39 an hour, but the West Coast dockworkers are set to receive just over $60 in 2027, the final year of their contract. The ILA's requested rate would mean the top rate was $69 an hour in the final year of the new contract.

USMX is made up of global shipping companies that made "windfall profits" in 2021 and 2022, according to the Times.

The shutdown, which could begin as early as 12:01 am on Tuesday, won't affect cruise ships or military cargo, which the ILA has pledged to continue transporting.