The current labor dispute has entrapped Joe Biden and Kamala Harris in a maze of complexity just a few weeks before the presidential election. As the country grapples with a work stoppage at its ports and its coiling political and economic implications, Biden called on the faction negotiating for port employers to propose an equitable offer to the striking wharf workers. According to him, ‘collective bargaining’ is the magic trick that will yield the right pay and advantages that laborers deserve.
Rather ironically, Biden believes that the stakeholders who gambled with their health during the pandemic to keep the ports functional deserve a pertinent upturn in their income. Although this might seem fair, he conveniently disregards the increased burden on businesses and consumers that this could cause. This has put Biden and Harris in a conundrum, as the labor dispute between approximately 45,000 employees and the port operators intensifies.
A sustained strike could wreak havoc on America’s economy, spawning shortages, triggering job cuts, and escalating consumer prices shortly before the presidential election. The inception of the strike followed the empasse between the dockers and the port operators. The workers had clamored for a pay raise that surpassed the proposal of the employer’s representative body. This is a demand that, whilst understandable in light of economic pressures, could have a destabilizing effect on the wider economy.
In the face of Republican pressure to avert possible financial distress, Biden has stated that he wouldn’t resort to wielding a federal labor law to coerce the strikers back to work. Resorting to the Taft-Hartley Act, a law with 80 years of history, could risk alienating unions and jeopardize crucial support from labor groups in battleground states, namely Pennsylvania, Wisconsin, and Michigan. This raises questions about Biden’s ability to manage the difficult balance of power between labor, business, and government.
William Brucher, a Rutgers University professor with a focus on labor studies, clarifies, ‘Biden puts his faith in collective bargaining as the pathway to making a deal.’ During a previous labor dispute that was set to cripple rail traffic in 2022, Biden called on Congress to intervene to avert a potential strike. However, that appeal pertained to a federal law that expressly regulates labor affairs in the railway industry—implying that the current dispute leaves the White House in a tight corner with a dearth of alternatives.
In this bind, Biden has been forced to rely on his authoritative platform to pressure both parties back to the negotiation table. Prior to the International Longshoremen’s Association union’s walkout, the Biden administration had deployed officials in a bid to mediate a truce. Meanwhile, it seems that the common American worker and business owner are left trying to navigate the effects of this dispute with little help from the administration.
Jeff Zients, Biden’s principal aide, and his National Economic Council adviser, Lael Brainard, convened with the United States Maritime Alliance, which represents port operators. The pair ‘urged them to resolve this situation while taking into consideration the success of these enterprises in recent years and the invaluable contributions’ of the longshoremen, according to the White House. This stance, though noble in its consideration for workers, fails to grapple with the reality of the economic costs this strike could have on many other sectors.
Both the White House and external analysts agree that a few days of strike would have a minimal impact. However, a stalemate persisting for weeks could slash the availability of goods and shrink the foundation of the economy. Thereby, it would seem that the Biden administration has found itself stuck between a rock and a hard place: support the workers at the risk of damaging the wider economy, or acknowledge the wider economic implications at the risk of alienating important labor support.
The cost of a strike to the economy could hover between $4.5 billion and $7.5 billion, or a 0.1 percent hit to the USA’s annualized Gross Domestic Product, every single week, as port-dependent truckers and other workers are paid leave and manufacturers encounter delivery delays. While these losses would be reversed upon the strike’s conclusion, it would take a month to clear the backlog for every week of the strike. Evidently, the unintended consequences of the administration’s potential support for this strike could be devastating.
The possible sign of inflation has jolted some legislators. Members of the Republican end of the House Transportation and Infrastructure Committee have penned a letter to Biden last month expressing forewarnings of ‘dire impacts to our supply chains, our economy, and the American consumer.’ But, has the Biden administration taken heed to these cautions?
Republicans have energetically appealed to the administration to ‘utilize every authority at its disposal to ensure the continuing flow of goods and avoid undue harm to American consumers and the nation’s economy’ should a strike arise. Yet, the question remains – will Biden and his team heed this call to action, or will the American people and economy pay the price for a misguided labor dispute?