To the Point: How Would a Longshoremen Strike Impact American Consumers?
To the Point provides insights from AU faculty experts on timely questions covering current events, politics, business, culture, science, health, sports, and more. Each week we ask one professor just one critical question about what’s on our minds.
Ìý
A major, historic United States port strike has been halted—for now—as the International Longshoremen's Association and the US Maritime Alliance announced a tentative agreement regarding wages. "Effective immediately, all current job actions will cease, and all work covered by the Master Contract will resume," the two organizations stated.
The Master Contract has been extended to January 15, 2025, allowing negotiations to continue through this date. However, a strike is still possible if the parties can’t find a compromise on the pace and extent of automation across the port system—one of the biggest and most complicated disagreements between the parties. Longshoremen want assurances that their jobs will not be replaced by the automated machines that are already in use in some ports around the world, making this issue a key focus of negotiations between both sides from now until January 15.
Although the country breathed a sigh of relief when the strike was called off for now, we wondered what might happen in January if the two parties cannot come to agreement over the big issue of automation. We turned to ask economics professor Mary Eschelbach Hansen to walk us through the scenario. As Co-Director for Administration for American University’s , Hansen’s research focuses on US social policy and has been published widely in the fields of economic history, bankruptcy, and race, gender, and economic inequality.
How would a longshoremen strike impact American consumers?
If a longshoreman strike goes on for more than a few weeks, it could affect Americans in several ways. Exactly how would depend on their location and situation. Ìý
If you rely on goods that are imported or exported, the supply chain disruptions could feel like pandemic 2.0. There are likely to be delays in deliveries, leading to shortages.
Consumers, if you are shopping for a new car, you may find that dealers’ lots are empty. If you are waiting for a car that you already purchased, be ready to wait some more! The ports affected by the shutdown include Baltimore, Maryland, and Brunswick, Georgia, the busiest ports for car imports. Heathy eaters, be ready to switch from fresh produce to frozen! The ports of Philadelphia are where a lot of fresh fruits and vegetables arrive. And if you, like me, favor coffees from South America (or Southeast Asia), you might need to switch it up, because those varieties come through New Orleans ports.
Retailers and producers, if you sell any of the imported stuff listed above or make your own stuff with imported materials (like steel, plastics, minerals, or chemicals), you might find your orders are delayed. Or, if you export any of the kinds of stuff listed above, you might need some extra warehouse space. Both importers and exporters might need to spend extra money to get goods shipped some other way.
As COVID-19 supply chain disruptions reminded us: Shortages lead to higher prices. Producers and retailers may raise prices to cover increased shipping costs, which could increase inflation. And more inflation, in turn, could cause the Federal Reserve Bank to hold off on lowering its target interest rate, as Chairman Jerome Powell recently it is likely to do. Ìý
Workers, if your job is related to shipping or logistics, your hours might be cut, or you might be laid off. Or, if you live near a port or in a city dependent on shipping, your local economy might suffer. That could potentially affect your job opportunities. Ìý
Investors, if you have investments in companies that rely on shipping, or that rely on the import or export of the types of goods listed above, you may see greater volatility in the prices of the stocks in your portfolio.
All Americans, to find out how much you might be affected, you can explore what is imported and exported through the affected ports by visiting this .Ìý
About Professor Hansen
Professor Mary Eschelbach Hansen is an expert in US social policy. She is currently working on issues in disability policy. She is widely published in the fields of child policy, bankruptcy, and economic history. Her work addresses key issues in race, gender, and economic inequality.
Hansen currently serves as Co-Director for Administration for American University’s . Her research has been funded by the National Science Foundation, the National Institutes of Health, the Alfred P. Sloan Foundation, and the Institute for New Economic Thinking. She has been quoted or cited by news outlets including WAMU, The Economist, Fortune, CNN, and the LA Times. She has given public testimony before the DC City Council and in Federal District Court.