The International Longshore and Warehouse Association Union (ILWU) seems ready to follow in the footsteps of a Canadian truck drivers strike that brought operations in Canada’s biggest port to its knees for 28 days in March.
Union bosses at ILWU are considering a strike that would cost the U.S. economy up to $2.5 billion a day should 30 ports between San Diego, Calif. and Bellingham, Wash. suffer prolonged strikes. Reportedly, west-coast ports employ about 13.600 dockworkers, according to a Wall Street OTC report published Sunday.
Threats of a massive ILWU strike come on the heels of an unexpected and severe contraction of the U.S. economy during the first quarter of this year.
The Commerce Department reported a -2.9 percent shrinkage during first quarter, a troubling contrast when compared to prior estimates of a much smaller -1.8 percent drop. The sharp drop in economic productivity makes it difficult for the Obama administration to sell its economic recovery between now and midterm elections only months away.
Meanwhile, Hillary Rodham Clinton, the presumed Democratic presidential nominee for 2016, recently stumbled on statements regarding her wealth during a heavily publicized Hard Choices book tour. Ms. Clinton lamented to a mainstream media television host that she and President Bill Clinton were “dead broke” after eight years in the White House. Within a few days Mrs. Clinton made headlines again for the wrong reasons, this time saying that “unlike others” her family pays “ordinary income taxes.” The Clintons’ net worth has been estimated to be over $125 million and she was recently awarded a $14 million advance for “Hard Choices.”
It was not immediately clear just how much damage a major West Coast port strike would do to the already slowest economic recovery in modern history.
A current study from the National Association of Manufacturers (NAM) and National Retail Federation (NRF) by economists at the Interindustry Forecasting Project at the University of Maryland claims “a protracted dispute between the negotiating parties could lead to reduced or shuttered terminal operations for an extended period.” The report added, “If such disruptions occur, the economic impact would be significant and widespread.”
The implications of a West Coast port strike lasting not nearly as long as the 28-day Canadian truckers strike are troubling, according to economists:
According to the study:
A 5-day stoppage would:
- Reduce GDP $1.9 billion a day;
- Disrupt 73,000 jobs; and
- Cost the average household $81 in purchasing power.
A 10-day stoppage would:
- Reduce GDP $2.1 billion a day;
- Disrupt 169,000 jobs; and
- Cost the average household $170 in purchasing power.
A 20-day stoppage would:
- Reduce GDP $2.5 billion a day;
- Disrupt 405,000 jobs; and
- Cost the average household $366 in purchasing power.
“It is important for the parties at the table as well as others to fully understand the economic consequences of a port disruption,” said NRF President and CEO Matthew Shay.