Ongoing negotiations over pay and benefits between the International Longshoremen’s Association (ILA) and U.S. port operators highlights the economic risks when unions monopolize labor markets. They also remind us that imports do, in fact, create jobs.
Since March the longshoremen have been in heated discussions with 14 ports along the East Coast over a labor contract that expires December 30. The union has been driving a hard bargain, refusing to adhere to monetary caps on bonuses based on the volume of cargo unloaded. These bonuses can reach up to $15,000 per year, in addition to average annual salaries of $100,000 and benefits that exceed $20,000.
So how much could a strike by the Longshoremen affect the U.S. economy? Besides the 14,500 longshoremen who would participate in the strike, any shutdown of the ports would have a ripple effect throughout the rest of the country. According to CNNMoney:
Tens of thousands of other workers who handle the freight, such as truckers, railroad and warehouse workers, could also find themselves temporarily out of work if a strike cuts off the flow of cargo.
Much has been said about how exports and manufacturing are great for the economy and for job creation. However, the threat that this strike poses to U.S. workers also shows the positive impact of imports on U.S. jobs. In fact, a recent report by The Heritage Foundation found that imports of apparel and toys from China create nearly 550,000 jobs for the U.S. economy.
Free trade and imports are vital to the U.S. economy, not just because they provide consumers with cheap goods, but also because they support jobs—from the dock to the store. Longshore work is a prime example. A strike by longshoremen could suck billions of dollars out of the economy and threaten others’ jobs during the holiday season. Only the Grinch could be that selfish.