Lasting only three days makes the walkout symbolic. A protest of sorts. Longshoremen are broke like most Americans these days thus can’t pay their debt on the peanuts the union gives them during a walkout
Debt slaves always chained to their lenders, employers and ultimately government.
Last strike by auto union was a rotational strike as only a portion of workers left the job at any one time.
I'm having a hard time being sympathetic to the ILA right now. They are incredibly well compensated. West Coast ports have more automation than the East Coast and Gulf region. International ports, especially in parts of Asia, are automated. Automation creates incredible efficiencies that would benefit markets and consumers. Stevedores and port workers have always resisted efficiency and innovation. They resisted the use of cargo containers. The optics for the strike are poor right now. Too many people are suffering from the hurricane's aftermath. I question whether the ILA delivers the value for the wages being paid, especially since no new efficiencies are created.
Ultimately, union contracts are always going to be a drag on economic efficiency. That's just the nature of the beast.
Big Business, Big Labor, Big Government....these are not entities that will ever promote efficiency of anything.
My focus is that the larger object lesson here is that this contract negotiation likely would not have been the contentious dumpster fire it has become were it not for the dislocations and disruptions caused by the Pandemic Panic nonsense.
The Pandemic Panic is the catalyst that gave us 2022's hyperinflaiton.
The Pandemic Panic is the catalyst to the supply chain dislocations that gave shipping companies outsized revenues and profits in 2021 and 2022.
But for the Pandemic Panic, this strike would, I suspect, not even be on anyone's radar.
The economics and linear common sense you lay out here, will of course be steam rolled in the fake news with emotional, equitable and political sound bites, meant to turn the public against the striking workers, that cast shade on the regime or it's dying economy.
Had these been fast food workers, there'd be protests in the streets calling for a 200% increase, to give them a dignified and livable wage. The difference, as you know, is the progressive, liberal, marxists in that scenario would have the luxuries of time and lack of impact - as striking McD workers are not going to shut down industries or empty store shelves.
The typical cat calls of greedy union workers and price gouging retailers - in an attempt to force a settlement or end of the strike - will be forthcoming. The drooler in chief will come out of the crypt and tell secretary booty-juice to intervene and "save America". And the cackler, when asked about the strike, will lament her childhood as a middle class pleb.
I've never been a fan of unions (having been in the BLET when I worked on the RR). Their original intent was good and served a purpose, but they are all but organized crime and grifters now - especially at the national levels. Had the Longshoreman union leaders been working hard for the dues paying members each and every year, that 77% disparity would be much less and their members might've felt less urgent about the walkout. I do think strikes are effective and warranted, when the workers see no other option, to problems they see no fix for (either on the union or company side).
I'd ask those who are and will demonize these workers: "Who makes a bigger impact on the economy, supply chain and your daily lives - the dockworkers or the fast food employees??"
The answer should be crystal clear, but if not now, will be in about 2 weeks.
If we agree the answer is the dock workers, then why would you not support them (workers who support and make possible your daily comforts and prosperity), the same way you supported and argued for a burger flipper, to make $20/hour??
I should add, my question to Peter is regards to the theories economists have postulated. They all agree that yes, there is a wage-price spiral, but then they argue about cause and effect, and severity, and who is to blame, and so on. It can get pretty convoluted, and their arguments get wrapped up in their particular views about fairness, government control, fiscal vs monetary policy, etc. I know that Peter will have one of the best-reasoned stances, so I’d love to hear his thoughts.
We must always be mindful that all prices are by definition an effect. In other words, they are the result of both supply and demand pressures in the marketplace (regulations on both sides of a transaction being one of those many pressures).
Wages are only one of those pressures.
We must also be mindful that the opposite side of the price coin is the phenomenon of "cost"--how much we pay for something.
Every price is a cost to somebody. Every wage is both the price of a man's labor and the cost of that labor to his employer.
Over time the totality of prices (and costs) in an economy trends towards a stable equilibrium, all things being equal. When one input is disrupted or altered, there is a disequilbrium introduced, but the long term trend will still be towards equilibrium.
You make a lot of valid points, Peter, and I’ve always been pleased with the extent to which you provide current, irrefutable data to back up your arguments. Impressive!
A 77% wage increase? If the longshoremen get anything close to that amount, most of the other union workers are going to want to strike for higher wages as well. This is what happened during the stagflation of the 1970s, which I remember well. The steel workers won higher wages through striking, then the union miners, then the auto workers, and so on. The result was so much economic pain and social turmoil, and jobs lost to overseas economies. I sure hope we’re not going to go through that again, but it looks like we will. (Fauci, you unthinking jerk, look at all the harm you’ve done with your lockdowns!)
Over the decades I’ve read many treatises on the intricacies of ‘wage-price inflation’. Some economists have said there is no such thing, that inflation is caused solely by the government. Other economists have stated positions along the gamut to the other extreme. I’d sure be interested to hear your full discussion, Peter, regarding to what extent you believe wage-price inflation affects the economy...if you’re so inclined. Thanks!
I agree! And for those of us who are retired and living on fixed incomes, it’s disastrous. For years I could buy organic strawberries on sale for as little as $2.99. This summer, they’ve been as high as $8.99! I’ve enjoyed very few strawberries this summer; what a bummer!
They could give them all a one time bonus . But if we keep raising wages for the lucky few, inflation will never stop. There are still jobs that still pay less than $10 an hour in Texas!
It's worth noting here that wages are fundamentally irrational--and we see why when we look at imbalances such as longshoreman's wages.
Consider the value a person brings to his labors. That value is not predicated upon his time, but upon his skill, his knowledge, and a variety of other factors.
Why do we compensate people only for their time.
In union situations, the irrationality is compounded because the uniform wage structures make it impossible for union workers to be compensated for anything BUT their time.
Could union contracts call for a measure of profit participation? Absolutely. And certainly that would have been a benefit to longshoremen over recent years and allowed them to reap some benefit from the highly profitable freight situation over the past few years.
And neither the unions nor management apparently have put any serious thought into such mechanisms--nor are they if I've read current reporting on the strike correctly.
Certainly both companies have a rather well-earned reputation for being rather predatory on their compensation structures. They have made it quite the science, figuring out how to not pay their employees.
We need to make more in this country, for our own consumption as well as for exports
Lasting only three days makes the walkout symbolic. A protest of sorts. Longshoremen are broke like most Americans these days thus can’t pay their debt on the peanuts the union gives them during a walkout
Debt slaves always chained to their lenders, employers and ultimately government.
Last strike by auto union was a rotational strike as only a portion of workers left the job at any one time.
Unions thus have zero clout.
I'm having a hard time being sympathetic to the ILA right now. They are incredibly well compensated. West Coast ports have more automation than the East Coast and Gulf region. International ports, especially in parts of Asia, are automated. Automation creates incredible efficiencies that would benefit markets and consumers. Stevedores and port workers have always resisted efficiency and innovation. They resisted the use of cargo containers. The optics for the strike are poor right now. Too many people are suffering from the hurricane's aftermath. I question whether the ILA delivers the value for the wages being paid, especially since no new efficiencies are created.
Ultimately, union contracts are always going to be a drag on economic efficiency. That's just the nature of the beast.
Big Business, Big Labor, Big Government....these are not entities that will ever promote efficiency of anything.
My focus is that the larger object lesson here is that this contract negotiation likely would not have been the contentious dumpster fire it has become were it not for the dislocations and disruptions caused by the Pandemic Panic nonsense.
The Pandemic Panic is the catalyst that gave us 2022's hyperinflaiton.
The Pandemic Panic is the catalyst to the supply chain dislocations that gave shipping companies outsized revenues and profits in 2021 and 2022.
But for the Pandemic Panic, this strike would, I suspect, not even be on anyone's radar.
Excellent post Peter.
The economics and linear common sense you lay out here, will of course be steam rolled in the fake news with emotional, equitable and political sound bites, meant to turn the public against the striking workers, that cast shade on the regime or it's dying economy.
Had these been fast food workers, there'd be protests in the streets calling for a 200% increase, to give them a dignified and livable wage. The difference, as you know, is the progressive, liberal, marxists in that scenario would have the luxuries of time and lack of impact - as striking McD workers are not going to shut down industries or empty store shelves.
The typical cat calls of greedy union workers and price gouging retailers - in an attempt to force a settlement or end of the strike - will be forthcoming. The drooler in chief will come out of the crypt and tell secretary booty-juice to intervene and "save America". And the cackler, when asked about the strike, will lament her childhood as a middle class pleb.
I've never been a fan of unions (having been in the BLET when I worked on the RR). Their original intent was good and served a purpose, but they are all but organized crime and grifters now - especially at the national levels. Had the Longshoreman union leaders been working hard for the dues paying members each and every year, that 77% disparity would be much less and their members might've felt less urgent about the walkout. I do think strikes are effective and warranted, when the workers see no other option, to problems they see no fix for (either on the union or company side).
I'd ask those who are and will demonize these workers: "Who makes a bigger impact on the economy, supply chain and your daily lives - the dockworkers or the fast food employees??"
The answer should be crystal clear, but if not now, will be in about 2 weeks.
If we agree the answer is the dock workers, then why would you not support them (workers who support and make possible your daily comforts and prosperity), the same way you supported and argued for a burger flipper, to make $20/hour??
I should add, my question to Peter is regards to the theories economists have postulated. They all agree that yes, there is a wage-price spiral, but then they argue about cause and effect, and severity, and who is to blame, and so on. It can get pretty convoluted, and their arguments get wrapped up in their particular views about fairness, government control, fiscal vs monetary policy, etc. I know that Peter will have one of the best-reasoned stances, so I’d love to hear his thoughts.
Thank you for the kind words!
We must always be mindful that all prices are by definition an effect. In other words, they are the result of both supply and demand pressures in the marketplace (regulations on both sides of a transaction being one of those many pressures).
Wages are only one of those pressures.
We must also be mindful that the opposite side of the price coin is the phenomenon of "cost"--how much we pay for something.
Every price is a cost to somebody. Every wage is both the price of a man's labor and the cost of that labor to his employer.
Over time the totality of prices (and costs) in an economy trends towards a stable equilibrium, all things being equal. When one input is disrupted or altered, there is a disequilbrium introduced, but the long term trend will still be towards equilibrium.
Big-picture wisdom.Thanks!
You make a lot of valid points, Peter, and I’ve always been pleased with the extent to which you provide current, irrefutable data to back up your arguments. Impressive!
A 77% wage increase? If the longshoremen get anything close to that amount, most of the other union workers are going to want to strike for higher wages as well. This is what happened during the stagflation of the 1970s, which I remember well. The steel workers won higher wages through striking, then the union miners, then the auto workers, and so on. The result was so much economic pain and social turmoil, and jobs lost to overseas economies. I sure hope we’re not going to go through that again, but it looks like we will. (Fauci, you unthinking jerk, look at all the harm you’ve done with your lockdowns!)
Over the decades I’ve read many treatises on the intricacies of ‘wage-price inflation’. Some economists have said there is no such thing, that inflation is caused solely by the government. Other economists have stated positions along the gamut to the other extreme. I’d sure be interested to hear your full discussion, Peter, regarding to what extent you believe wage-price inflation affects the economy...if you’re so inclined. Thanks!
It’s so obvious that the wage price spiral is happening now. Fast food is the best example.
I agree! And for those of us who are retired and living on fixed incomes, it’s disastrous. For years I could buy organic strawberries on sale for as little as $2.99. This summer, they’ve been as high as $8.99! I’ve enjoyed very few strawberries this summer; what a bummer!
They could give them all a one time bonus . But if we keep raising wages for the lucky few, inflation will never stop. There are still jobs that still pay less than $10 an hour in Texas!
It's worth noting here that wages are fundamentally irrational--and we see why when we look at imbalances such as longshoreman's wages.
Consider the value a person brings to his labors. That value is not predicated upon his time, but upon his skill, his knowledge, and a variety of other factors.
Why do we compensate people only for their time.
In union situations, the irrationality is compounded because the uniform wage structures make it impossible for union workers to be compensated for anything BUT their time.
Could union contracts call for a measure of profit participation? Absolutely. And certainly that would have been a benefit to longshoremen over recent years and allowed them to reap some benefit from the highly profitable freight situation over the past few years.
And neither the unions nor management apparently have put any serious thought into such mechanisms--nor are they if I've read current reporting on the strike correctly.
In that case Amazon and Walmart should be giving raises , too.
Quite possibly.
Certainly both companies have a rather well-earned reputation for being rather predatory on their compensation structures. They have made it quite the science, figuring out how to not pay their employees.