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Obama’s Reaganesque Choice? Strike Breaker or Economy Killer

Less than a month from now, on September 30th, a union contract covering about 14,500 workers at 14 ports up and down the U.S. East Coast expires. The union, the International Longshoreman’s Association* (of On the Waterfront fame and one-third of whose members reportedly make more than $200,ooo annually) has already authorized a strike that would begin on October 1st.

With an economically-devastating strike becoming more and more likely, East Coast ports and the companies that rely on cargo coming into ports up and down the East Coast are beginning to expend resources to prepare for the possibility. However, in an election year, with the November elections looming, this couldn’t come at a worse time for Barack Obama as he may soon be faced with a difficult choice: Either break a union strike (and alienate his key backers) or endanger the U.S. economy (and alienate voters).

 

With the ILA stating that a strike looks more likely, a strike’s impact would cost the U.S. economy billions each day, in addition to possible job losses. While a brief strike may not be noticeable to the public at large, it would be felt in the transportation (rail and trucking) and retail sectors:

“Even a work stoppage of one or two days can cause weeks of disruption,” he said.

Barry Bailey, director of transportation at Bernhardt Furniture, agreed, noting that furniture logistics executives are in a classic “no-win” situation.

“You have a choice between more transit time, if there is a work stoppage, or more transportation costs, if you use the West Coast,” Bailey said. “And if the West Coast ports become congested, you could face more transit time and higher costs.”

[snip]

“We are facing a critical time,” said Matthew Shay, the federation’s president and CEO. “Now that there is a real risk of disruption, most retailers using East Coast and Gulf Coast ports will be forced to execute contingency plans within the next week to meet in-store holiday deadlines.”

Indeed, there are people who are most likely feeling the effects of the strike preparations through reduced overtime or temporary displacement.

According to the Savannah Morning News, Savannah shippers have already begun diverting cargo to the West Coast (which is controlled by the ILWU—a different union with a different union contract). Savannah is “the fourth busiest container port in the country and second largest on the East Coast” (after Newark).

In Virginia, the Virginia Port Authority (VPA) announced it’s working with port operator Virginia International Terminals (VIT) and cargo owners to begin transferring as much as 10 to 15% of the cargo work away from Virginia as well.

In 1980, as a former union president himself, the new President of the United States, Ronald Reagan, faced a difficult choice—to allow air traffic controllers (who were federal government employees) to illegally strike and shut down the nation’s airways, or to enforce the law.

Reagan chose to enforce the law (which forbids federal government workers from striking) and terminated more than 11,000 striking air traffic controllers. For this, Reagan has (wrongfully) been blamed for the decline of unions in the United States.

While Reagan’s actions were to end a strike by federal workers, under the 1947 Taft-Hartley Amendments to the National Labor Relations Act, U.S. presidents also have the power to end labor disputes in the private sector (by ordering an 80-day cooling off period) if the labor dispute endangers the nation’s health or security.

While Taft-Hartley was passed over then-President Harry Truman’s veto, he used its provisions 10 times during the remaining years of his presidency to break strikes.

While hard-core unionists consider Taft-Hartley to be a “union-busting” law, the New York Times notes, “Democratic presidents have issued approximately two-thirds of all the orders to invoke Taft-Hartley.”

Taft-Hartley’s most recent usage, however, was when ended an 11-day lockout at the West Coast ports in 2002 in the wake of the September 11th attacks.

Since Barack Obama’s most ardent backers are union bosses, his invoking Taft-Hartley early in a port strike would not bode well for his reputation as  a “union-friendly” president. Becoming a strike breaker could cause blocks of union voters to stay home on election day.

On the other hand, though, if Obama allows a port strike disrupt the nation’s economy, he will be further seen as nothing more than a union puppet and likely alienate some swing voters that are critical to his re-election.

Obama could also choose a third course of action which would be to let the longshoremen strike for a short while (a week or so), make a few behind closed-door promises to union bosses of what else he will do for them in his second term to make up for his invoking Taft-Hartley, then go on national television and publicly end the strike. Were he to choose this course—with the cooperation of union bosses—he would make himself appear more “Reaganesque” in the minds of some swing voters. Then, were he to win the election, the ILA could resume their strike after the holidays and cripple the economy in 2013.

Lastly, of course, the parties could reach a last minute deal before September 30th (or agree to extend their contract beyond the election) which would take the pressure off of Barack Obama entirely.

*Note: There are two main ‘longshore’ unions and the two are sometimes confusing to average readers. The first longshore union is the International Longshoremen’s Association, or ILA (which is the subject of this post); the second is the International Longshore and Warehouse Union, or ILWU.  The ILA is the more traditional of the two unions and represents primarily the East Coast dockworkers (see background here), while the ILWU is younger, more left-leaning, and represents primarily the West Coast dockworkers (see ILWU background here) and actually seceded from the ILA in the 1930s. While the ILA has been linked to organized crime, the ILWU is more Marxist and has been the subject of much scrutiny the last year.

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“Truth isn’t mean. It’s truth.”
Andrew Breitbart (1969-2012)

Cross-posted on LaborUnionReport.com

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