The International Longshoremen’s Association (ILA) strike put much at stake, with union President Harold Daggett setting out to “cripple” the economy and the United States Maritime Alliance (USMX). Naturally, things got political. Florida Gov. Ron DeSantis accused the feds of inaction and deployed the National Guard into ports to move supplies for the Hurricane Helene recovery effort. The White House then claimed that their Zoom calls pushed the two sides together for a deal. In other words, chaos.
Not for long, though. The walkout lasted three days before the union suspended the strike and closed ports went back into operation.
Via a joint statement, ILA and USMX agreed to raise the top-end hourly wage rates from $39 to $63. That’s a 61% boost as opposed to the 77% demanded by Daggett, but it’s significant. One wonders how shipping companies will afford that boost—hold that thought.
Negotiations for a new six-year contract will continue with the current ILA contract remaining in effect until Jan. 15, 2025. The biggest issue left to settle also stokes tension in the food service, logistics, and auto manufacturing industries.
You guessed it: automation. It’s both a nuanced issue and a sticking point. Daggett had refused to waver, demanding “airtight language that there will be no automation or semi-automation.”
How difficult will this be to resolve? Ex-U.S. Deputy Secretary Of Labor Seth Harris, who served under Obama, told Bloomberg TV that the wage resolution is a promising indication that automation talks could go more smoothly than the wage talks. This sounds, to be frank, unrealistic.
“A job killer”: That’s how unions refer to automation, and they want none of it. Yet it’s naive for unions to believe that massive wage hikes wouldn’t accelerate automation because when labor prices dramatically rise, money must be saved somewhere, and increasing company productivity through automation will only help that cause.
A reality check: As labor economist Lila Palagashvili has eloquently discussed, technological advances are unavoidable in most industries, and jobs will likely be lost in the short term, but other jobs will be created with overall productivity improving.
The current dissent: Unsurprisingly, far-left voices are calling the strike suspension a “sellout” and a betrayal by not resolving the automation issue. They compared the situation to Stellantis job cuts, which are due to market conditions, and UPS layoffs and closures of some facilities after Teamsters contract negotiations boosted full-time drivers to $170,000 salaries. One outlet even claimed that “UPS CEO Carol Tomé confirmed the company would be automating ‘everything’” during a CNBC discussion.
Well, that is not what Tomé actually said. She merely detailed how the inside of some facilities would become fully automated to scan packages and load them into trucks, but this automation would create opportunities elsewhere in the company, i.e., these workers could “move off the floor of the building and go into the control room.”
Food for thought: It’s worth noting that the UPS CEO’s choice of words in messaging—prior to her mention of jobs being created to replace jobs lost—could have left the window open for a union to stoke panic. Additionally, companies should stay mindful of helping workers level up their skills to qualify for new roles. These points of union vulnerability can be prevented long before a company’s automation plans become cable news fodder.