Important Takeaways:
- President Joe Biden has said he will not intervene to force striking ILA union workers back on the job at East and Gulf coast ports, a political calculation that balances the power of unions ahead of a tight election with concerns about the economy, the No. 1 issue for many voters.
- Biden and top administration officials including Transportation Secretary Pete Buttigieg and acting Secretary of Labor Julie Su have focused more attention on the ocean carriers and “price gouging” since the strike began.
- If the union prevails in its battle for a large wage increase, there is the risk of a resumption of wage inflation that could upset the Fed’s so-far successful efforts to tame inflation, though recent Fed concern has focused more on a potential labor slowdown than boom conditions.
- President Biden said on Tuesday that his administration will be “monitoring for any price gouging activity” that benefits foreign ocean carriers, including those on the USMX board. He also said “foreign ocean carriers have made record profits since the pandemic, when Longshoremen put themselves at risk to keep ports open.”
- For months, logistics and business trade groups representing major industries from retail to manufacturing and agriculture have sent numerous letters to Biden and his administration urging intervention. Now, with the president sticking to his position that collective bargaining is the only means for a “fair deal” for the ILA, executives across the economy are beginning to weigh the potential pricing impacts for their business models.
- Steve Lamar, CEO of the American Apparel and Footwear Association, said “Allowing the status quo to persist increases the likelihood that this port crisis will hurt our industry and the overall U.S. economy through job losses, higher prices, and goods shortages”
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