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**OCTOBER 4, 2024**
The 2024 election is approaching, and the
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Kuttner on TAP
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**** Biden's Amazing Win Settling the Dock Strike
The terms are a total victory for dockworkers and for smooth supply chain operation, as the White House faced down exorbitant shipper profits. What would Trump have done?
In September, as ocean shippers refused reasonable wage increases for East Coast dockworkers despite exorbitant profits and a strike became likely a month before the election, the White House went into high gear-and settled the strike entirely on worker terms.
The strike lasted just three days. The shippers agreed to a 62 percent wage increase sought by the International Longshoremen's Association (ILA), amending the current contract and extending it to January 15, allowing additional time for further bargaining over details such as automation.
Only an administration so strongly on the side of workers, willing to call out windfall industry gluttony,
**and competent at the details of governing**, could have delivered this result. Just imagine how Donald Trump would have handled a similar challenge.
In mid-September, Jeff Zients, the White House chief of staff, assigned National Economic Council Director Lael Brainard to identify pressure points on the shippers. Acting Labor Secretary Julie Su was dispatched to work with the union. Transportation Secretary Pete Buttigieg was tasked with monitoring supply chain effects of a strike and enlisting concerned companies as allies.
White House research and public documents revealed a degree of windfall profits on the part of ocean shippers that shocked even Biden senior staffers. In 2023, Maersk paid out over $10 billion to shareholders. Hapag-Lloyd paid out over $12 billion.
On September 27, the White House invited the industry side to an in-person meeting with Brainard, Su, and Buttigieg. At the meeting, Biden's people made clear that the president had no intention to accede to industry demands that he use emergency powers under the Taft-Hartley Act to suspend the strike for 80 days, and that he expected the industry to reach a settlement with the union.
The U.S. Maritime Alliance, known as USMX [link removed], actually has three different sets of stakeholders, with somewhat different interests: terminal operators, port associations, and ocean shipping companies, the largest being foreign-owned. These include Evergreen Shipping Agency (Taiwan); Ocean Network Express (Japan); Hapag-Lloyd (Germany); Maersk (Denmark); CMA CGM (France); Cosco Shipping Lines (PRC); and Mediterranean Shipping Company (Switzerland).
[link removed]
It was the ocean shippers that had the most exorbitant windfall profits in the years since the pandemic. Between 2015 and 2023, shipper profits were up about 350 percent. To add insult to injury, they were planning to add shipping surcharges in the event of a strike.
The shippers would have to pay the lion's share of a wage increase, and they could well afford it. If they refused, the terminal operators would suffer along with the dockworkers and the general public. Biden's team astutely used these differences. But still the industry refused to bargain seriously.
The White House began disseminating details of shipper windfall profits. On October 1, Biden personally called out the industry [link removed] for having increased its profits by as much as 800 percent during the pandemic, as well as increasing executive compensation. "It's only fair that workers, who put themselves at risk during the pandemic to keep ports open, see a meaningful increase in their wages as well," Biden said.
Brainard got in touch with senior executives of each of the major foreign-owned shippers on Zoom calls. She explained that the White House was not backing down and would support the workers.
In the end, it was the industry that caved, offering a 62 percent wage increase for the 45,000 port workers over six years, a tiny fraction of their windfall profits. The ILA suspended the strike, confident that the White House would continue to have their back as final negotiations for a six-year contract continued.
Let's just imagine how Donald Trump might have handled this. For starters, given the kind of clowns he has appointed to top government posts, he would not have had senior officials of the caliber of Brainard, Su, and Buttigieg. Second, despite his occasional flights of pro-worker rhetoric, all of his class instincts would have been on the side of industry. He might well have issued a Taft-Hartley injunction to break the strike, after someone explained to him what it was.
This settlement has everything to do with justice for workers, averting another supply chain debacle, and heading off another needless bout of inflation. The details are a bit complicated, but not that complicated. If Harris and Walz can just get a little better at connecting the dots, this administration success should figure bigly in the campaign.
~ ROBERT KUTTNER
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On the Prospect website
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