On the Waterfront, the Sequel
The dockworkers strike is an education in monopoly union power.
By
The Editorial Board
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Updated Oct. 3, 2024 8:30 pm ET
The dockworkers shutting down East and Gulf Coast ports called off their strike late Thursday after port operators proposed a 62% wage increase over six years. Americans will be spared the economic pain from a longer strike, but it’s worth examining this episode for its reminder of forgotten lessons about union monopolies and labor-boss politics.
It wasn’t clear as we wrote this what happened behind the scenes, but it looks as if the business consortium negotiating with the union gave way under political pressure. The union wanted a 77% raise to $69 an hour, while the consortium had offered 50%.
President Biden had threatened the United States Maritime Alliance (USMX) with legal action this week if it didn’t give in further to union demands. “My Administration will be monitoring for any price gouging activity that benefits foreign ocean carriers, including those on the USMX board,” he said in a statement. This was a direct threat to Maersk and other ocean carriers if they added a surcharge because of the disruptions from the ILA strike.
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One myth exposed by the strike is that unions need more economic and political power because they help the working man. The union behind this strike, the International Longshoremen’s Association (ILA), helps some workers at the expense of countless others.
Start with the astounding fact that there were 50,000 or so ILA strikers but only 25,000 or so port jobs. That’s right, only about half of the union’s members are obliged to show up to work each day. The rest sit at home collecting “container royalties” negotiated in previous ILA contracts intended to protect against job losses that result from innovation.
And what a deal for those favored few who do show up to work. The 2019-2020 report of the Waterfront Commission of New York Harbor laid out the reality: “The absolute control of the International Longshoremen’s Association, AFL-CIO (ILA) over hiring in the Port for over 60 years has not only led to a lack of diversity and inclusion in waterfront employment, but also to the perpetuation of criminality and corruption.”
Residents near the ports can’t get hired because of this union control. “Meanwhile, those who are connected to union leadership or organized crime figures are rewarded with high paying, low-show or no-work special compensation packages,” the report said.
More than “590 individuals continue to receive over $147 million in outsized salaries not required by the industry’s collective bargaining agreement and for hours they do not even have to be at the Port,” the report continued. “Such positions were overwhelmingly given to white males connected to organized crime figures or union leadership.”
This is how ILA boss Harold Daggett earns $900,000 a year, drives a Bentley and owns a 76-foot yacht. And this is the union that President Biden, Kamala Harris and “national conservative” intellectuals extol as tribunes of the working class. Why hasn’t Mr. Biden rung up these guys for “systemic racism”?
This is what happens when unions are granted monopoly negotiating power that lets them extort outsized rents. The ILA is the sole union bargainer for East and Gulf Coast ports, and there is little non-union port competition. The union has a chokehold on commerce that gives it extortionary leverage.
The ILA is like the coal miners and railroad unions that shut down the British economy in the 1970s, or the unions that paralyze transportation in France today. When ILA members strike, they stop trade in goods and hurt literally millions of workers who earn far less than the members of the ILA. Mr. Daggett was happy to put countless truck drivers, warehouse employees, retail clerks and auto workers out of work so he and his “connected” members can buy another yacht.
This is why Congress passed the Taft-Hartley Act over the veto of Harry Truman in 1947. The 1935 National Labor Relations Act had handed vast new power to unions that resulted in waves of strikes, including secondary boycotts and forced union membership. Taft-Hartley rebalanced the rules for collective bargaining that continue today.
Taft-Hartley also gives the President the authority to seek a court order for an 80-day cooling-off period so companies and unions can negotiate without a strike. The provision was intended for labor disputes like the one at U.S. ports that do great economic harm. George W. Bush invoked it in 2002 to stop an 11-day labor action at West Coast ports.
Yet Mr. Biden refused to invoke the law, and Ms. Harris agreed. “I don’t believe in Taft-Hartley,” Mr. Biden said.
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All of this should have been an opportunity for Donald Trump to defend the jobs of millions of Americans by calling for Mr. Biden to use his power to end the strike. But the former President instead issued a statement taking a protectionist shot at “foreign flag vessels.” This is political and economic malpractice.
It’s fashionable in Washington these days to think that handing Big Labor more power will help workers and reduce inequality. It won’t. It will enrich labor bosses and assist the politicians they support, while damaging the economy and limiting the broader wage gains needed for shared prosperity.
