Uniting Employers and Labor Unions

While a port labor agreement is in place, why is labor ideology still allowed to strangle the Inland logistics economy?

Transit Talking Points by: Nicholas Ventrone, Community Engagement Director

One of the historic fundamental goals of labor unions was to ensure workers had the legal right to organize and address fundamental workplace-related problems universally and collectively without fear of retaliation. That includes holding employers accountable for providing a safe workplace and paying workers fairly for the work done. Plus, unions backed the Fair Labor Standards Act which set up many of the current labor laws regarding breaks and overtime for hourly employees. The act also put into law fair minimum wages so that entry-level workers can be fiscally independent and not rely on government subsidies to care for themselves and their families. Plus, the federal legislation put into place strong regulations on child labor.

In addition, if an employer failed to address any legitimate complaints regarding poor working conditions or excessively low salaries which directly contribute toward legitimate hardships, workers would have then have the right to stop working altogether without fear of being fired until the employer dealt with those issues.

Page back to the days of the Industrial Revolution and Great Depression and you'll see exactly why labor unions have an important role in America and why these basic worker rights need to be maintained in federal law.

Port Labor Dispute and Tentative Agreement

Fast forward to the recent goods movement bottleneck and work slowdown at the Western seaports that made sitting in traffic on the 91 look like a paradise.

The obstruction all along the west coast had been caused primarily by a dispute between a coalition of port employers and a dock worker labor union. Reports show that the Longshore and Warehouse Union and the Maritime Association of Companies have been in a political gamesmanship for 9 months, far too long. Late last week, negotiators from both sides reached a tentative coastwide contract agreement for five years and full operations is expected to resume.

As I've pointed earlier this week, I don't work at the ports; so I have to remain impartial on this case and cannot lay judgement against either party regarding the specifics. I have to rely on the hard facts. While full operations resumed this week, I foresee no long-term unity between the union and employers--not until serious reforms are made. More on that in a moment.

The Slowdown at the Ports

This slowdown led to serious economic losses globally as the bottleneck choked off shipments to/from logistics and goods fulfillment companies who rely on these ports. More than 30 cargo ships were reported sitting outside the ports of Los Angeles and Long Beach doing nothing after the President's Day weekend. Logistics is one of the Inland Empire's primary sectors that drives its economy.

To add fuel to the fire, port employers in response locked out all of its dock workers last weekend including those who were actually putting in the extra effort, thus shutting down the ship loading and unloading operations for five days as weekend and holiday pay for the workers are higher at these times. It's true that the companies did not want to reward the workers who were derelict with higher weekend and holiday pay given the overall incompetent performance--that's a valid argument, but that decision exacerbated the slowdown which rippled throughout the entire global economy. The employers should have known better.

Because there's now finally a tentative agreement, the number of idling ships is expected to decline. But as I've already mentioned, Congress needs to collectively introduce serious reform measures to prevent labor unions from obstructing the economy. That's because union workers have much to lose if the economy were to collapse again. 

The Irony: Too much greed in labor will backfire with lost union jobs

The irony behind all of this is that some present-day labor disputes--many of which involve increasing already fair wages and benefits--have been allowed to clog the economic system to the point where buyers either have or threaten to take their business elsewhere. ILWU put several of the 20,000 dockworker jobs at stake because shippers had other options to get goods into the American marketplace. If the West Coast ports lose such business, how can the port companies pay their employees?

As you may have remembered from the supermarket strike and lockout last decade, many grocery customers took their business to Stater Bros, Costco, and Wal-Mart. Vons, Ralphs and Albertsons lost a significant share of its customers during that labor dispute which certainly caused harm to many of their workers and took years to recover.

Do the port employers and labor union really want that? 

Washington Intervenes; ILWU, PMA reach tentative five-year agreement

Moving forward, there was progress happening in Washington which saved off a potential economic crash in logistics. Because numerous Inland companies that were affected have pressured the politicians to act, the U.S. Department of Labor under the direction of President Obama finally stepped in and demanded the sides to come up with an agreement.

Department of Labor Secretary Thomas Perez was very firm with the fed's message saying, "I told the parties that I am neutral on the issue of how they resolve the arbitration impasse, but the president is not neutral on the question of how quickly they needed to resolve that impasse."

While the actual agreement could be very questionable, Perez is to be praised in getting the two sides to agree on this issue promptly. The Coalition has been tough on the Labor Department because of its actions in the past, but this intervention is certainly praiseworthy.

Debating Long Range Solutions for Future Labor Disputes

Looking further ahead, President Obama and Congress need to become more engaged in this labor situation so that it does not happen again. Washington needs to unite labor unions and employers and get some fair solutions put into law. The divisive bickering, power grabs, and excuses all need to stop.

Labor unions must not be allowed to be in such a power-grab position where they can hold sectors of the economy hostage. The President and Congress should take a look at the Taft-Hartley Act and other laws so that labor disputes cannot disrupt economic productivity. Federal law should allow the president as well as the executive branches of state and local governments to intervene if a labor slowdown, strike or lockout affects security, health, or a significant portion of the economy or an industry. That would include transit operations and goods movement.

Labor laws should ensure that employees have a safe place to work and be paid fair wages. Full time employees should not be in a state of poverty nor be dependent on the government for food or shelter. Economists should be tasked to calculate fair minimum wages and benefits. At the same point, employers should have the authority to discipline or fire any derelict workers and reward and give raises to those who bring value to their companies.

According to the PayScale.com and Indeed.com sites that measure marketplace wages, the starting wage for a skilled dockworker is just under $14/hour, $49k/year for a Dock Operations Supervisor and $96k/year for a Top-Tier Dock Operations Manager.

Being two major western ports, I understand that LA and Long Beach dockworkers have additional responsibilities and handle more freight which warrant a few extra dollars onto their salaries plus health benefit perks. But further raises and benefits must be fair and based on merit. Bottom line is if the worker brings value to a company, he/she should be given the extra pay and perks.

Washington politicians need to consider this as fair solutions toward future labor disputes.