December 19, 2012
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: