The real issue in the port strike: Automation

Most news reports on the east coast dockworker's strike are focused on the issue of wages, which obscures the real reason for the strike: automation. The International Longshoreman's Association (ILA) is fighting a rear-guard action against robots taking over jobs of any of its 45,000 members. The ILA is dug in on the issue because it is an existential threat to them.

That's why this could be bad news for consumers even if the strike is short. If the union gets most of what it wants from their employers, the United States Maritime Alliance (USMX), regarding automation, then US ports will continue to lag behind international ones in terms of speed and efficiency.

USMX has offered a 50 percent raise to dockworkers who already make around $150,000 annually. That is not enough for the ILA. What the union wants in their contract regarding automation is what Michael Corleone offered the politician in the beginning of The Godfather Part II: Nothing.

"USMX is trying to fool you with promises of workforce protections for semi-automation. Let me be clear: we don't want any form of semi-automation or full automation," ILA president Harold Dagget and ILA executive vice president Dennis Dagget (Harold's son) said in a September letter to members.

Jack Pennington, president of ILA Local 28, summed up the thinking in a Facebook post. "I have heard the remarks from those that say we need to learn how to deal with [automation]! Well, I have a message for those people 'kiss my fat A$$'!"

The lack of automation at US ports was a contributing cause of the supply chain crisis of 2021. The International Longshore and Warehouse Union (ILWU), which represents most dockworkers in California, Oregon, and Washington state, has fought any and all efforts at modernization. The union even refused allow its members to work on any automated vessel that docked at a US port.

The World Bank's Container Port Performance Index does not have a single US port in its top 50 ranking for efficiency. Charleston and Philadelphia come in at number 53 and 55, respectively.

The current strike could cost the US $5 billion a day according to an analysis by JP Morgan Associates. New York City ports alone have nearly 100,000 containers waiting to be unloaded, according to port officials. The shock won't be felt by the public immediately since it will take a while for the existing goods to dry up, but it will exacerbate the existing inflation rate once store shelves start to empty. That will put pressure on the White House to intervene and force a contract.

The 2021 crisis was ended with the help of a deal negotiated by the Biden administration that gave the dockworkers a significant boost in wages but didn't really change the status quo on automation. Dagget has argued that the ILWU deal was weak, and he is angling to prevent that from happening to his union.

"In L.A., [the Biden administration] told the union, hurry up and get a contract. That's the mentality they have. They don't even know what the hell they're doing today. Well, I know what I'm doing, I'm going to save everybody's job," Daggett said according to Politico.

Daggett is, therefore, not inclined to do any favors for the Biden administration to bend and prevent any broader damage to the economy, even if that hurts Vice President Kamala Harris's presidential bid.

Nor are many of his members seemingly inclined to help out the current administration. A photo of striking dockworkers in the Tuesday edition of the Wall Street Journal showed them standing in front of a Trump banner.

In short, the union is holding out for a demand, no automation at all, that is not realistic, but they are ready to fight bitterly for it anyway. And they're not in the mood to make this easy for anyone else. This could get ugly.

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