Notes on the ILA tentative agreement and the end of the strike

The Biden Administration intervened in the ILA-USMX (employers and shippers) negotiations—via Secretary of Labor Julie Su and Secretary of Transportation Pete Buttigieg—early on eventually getting the union to end its three-day strike in return for a 62 percent wage increase over six years. This was less than the 77 percent the union asked for, but more than the 50 percent the USMX employers offered.

The Administration put pressure on both sides to reach this tentative agreement and prevent a strike. The central issue of automation is to be negotiated between now and January 15, 2025, when the extended contract expires and a strike becomes legal. The Wall Street Journal, however, reports that a “shipping industry official” said that the wage agreement was “reached on the condition that dockworkers agree to efficiency gains that include more technology”. If this is accurate, the whole agreement is meant to favor not only the Democrats in the election, but the employers on matters of automation. There is no strike threat until January 15 and only the ILA president, Harold Daggett, who makes $900,000 a year, can call a strike. ILA members do not have an official vote on a strike—although some locals took polls of members this year. 

Liberals have hailed this as a pro-union effort by Biden as well as a diversion from an embarrassing and highly disruptive pre-election strike that might favor Trump. They point out that the Association of Manufacturers and the US Chamber of Commerce called on Biden to invoke Taft-Hartley to prevent a strike and he heroically resisted. USMX, however, made no such demand as it was entirely unnecessary. 

The basic fact is that the Administration “jawboned” the union into removing the leverage of a strike until after the election and after imports typically drop dramatically to their lowest annual level in January and February after the holidays as all the parties involved would have known. (See the graph below.) So, the union will have much less leverage even when a potential strike date finally arrives with the contract’s expiration on January 15. It is worth remembering that the Biden Administration has similarly intervened directly in bargaining to prevent strikes by the ILWU, IBT at UPS (even if it became unnecessary to do so), and rail unions prior to this latest strike-breaking action. 

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