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Workers at major East Coast ports launch strike that could have significant economic impact

Workers at major East Coast ports launch strike that could have significant economic impact

Topline

Longshoremen at all major ports along the East Coast began striking on Tuesday, a move that could have a significant impact on the U.S. economy just weeks before the presidential election.

Important facts

Members of the International Longshoremen's Association (ILA) began their strike at midnight after failing to reach an agreement with shipping companies and port operators represented by the US Maritime Alliance (USMX).

The ILA is calling for a 77% wage increase over six years, as well as a ban on automation, which it says harms workers.

According to the Associated Press, some progress was reported between workers and port operators hours before the strike began.

In a statement, USMX said it had improved its offer to include 50% increases over six years while maintaining current agreed-upon limits on automation.

However, the ILA refused to meet with the port operators group until its wage demands are met, the Wall Street Journal reported.

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Big number

45,000. That's the number of longshoremen the ILA represents at 14 major East Coast ports affected by the closure. The affected ports are Baltimore; Boston; Charleston, South Carolina; Jacksonville, Fla.; Miami; Houston; Mobile; New Orleans; New York/New Jersey; Norfolk, Va.; Philadelphia; Savannah, Georgia; Tampa, Fla.; and Wilmington, Delaware.

Will President Joe Biden intervene?

The White House said Monday that Chief of Staff Jeff Zients and National Economic Council Director Lael Brainard met with the port operators group on Monday and urged them to resolve the issue quickly and fairly. President Joe Biden has the authority to intervene in the strike using the Taft-Hartley Act, which could postpone the strike for 80 days. Biden faced pressure from Republicans in Congress and business leaders to intervene and end the strike. Biden told reporters on Sunday that he would not invoke the Taft-Hartley Act, adding: “Because it's collective bargaining and I don't believe in Taft-Hartley.”

What impact will it have on the US economy?

Experts have offered slightly different numbers on the impact of the strike on the U.S. economy. Grace Zimmer, an economist at financial analysis firm Oxford Economics, told the BBC the strike could cost the economy up to $7.5 billion a week. JP Morgan estimates the number could be even higher, costing the economy between $3.8 billion and $4.5 billion a day. The strike is unlikely to have an immediate impact on consumers as retailers have shipped many holiday shopping items early and diverted other cargo to West Coast ports. However, the longer the strike lasts, the more noticeable its impact on prices becomes.

Further reading

Expected Longshoremen's Strike Could Cost Billions – Here's What You Need to Know (Forbes)

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