Biden’s embrace of Big Labor could be his biggest mistake yet
Joe Biden has just made the worst mistake of his presidency, and that’s saying something.
By not intervening to prevent the walkout by 47,000 East Coast dock workers, the president has singlehandedly increased the odds of an economic downturn, raised the possibility of another round of inflation, soured Kamala Harris’s political prospects and — perhaps most damaging of all to his legacy — probably squashed what had been increasing public enthusiasm for organized labor.
There’s nothing like running short of Pampers or Legos at Christmastime to infuriate consumers. And there’s nothing like demanding a 77 percent pay hike over six years to make those same consumers turn against the strikers.
President Biden repeatedly refused in the weeks and days leading up to the International Longshoremen Association’s (ILA) strike to involve himself in the labor dispute. Asked the day before the deadline if he would intervene, Biden demurred, explaining that, “It’s collective bargaining. I don’t believe in Taft-Hartley.”
Except that it isn’t really collective bargaining when the two sides have not met for months, which was the case with the dockworkers. The Maritime Alliance, the global shippers’ group that employs the longshoremen on the East Coast, was left negotiating with itself, raising its offer of a 40 percent wage increase to 50 percent as the hours ticked down, with the union having spurned the earlier offer as “insulting.”
Substantially higher pay was not the only issue on the table. The union insists the new contract effectively ban any attempts to automate our ports; reportedly the ILA broke off talks in June when a union official noticed an automatic gate opener operating at a port in Alabama. It was a phony excuse — workers at the port claimed the device had been in operation since the port opened in 2008.
The demands of the union, many of whose members earn over $200,000 per year with overtime, seem high in the context of 2-3 percent annual inflation. But Joe Biden has encouraged organized labor — his most important political ally — to make outsized demands in recent years, and several unions have been more than happy to do so.
Biden, who has described himself as the most pro-union president in history, famously “walked the picket line” when the UAW went out on strike last year, pushing them to demand the moon even as automakers were struggling to meet the White House’s injurious electric vehicle mandates. The president told the striking UAW workers, “You deserve a significant raise,” putting his thumb on the scale. He recklessly encouraged the picketers to “stick with it,” and shouted “Yes” when someone asked if the UAW should get an over-the-top 40 percent raise.
Backed by the president, the UAW won pay hikes of more than 30 percentby the end of April 2028, as well as increased job security; analysts estimated the increased labor expense would cost each of the car companies $1 billion.
The UAW pressed for higher wages in part by arguing that inflation had hurt their members, and that Detroit had prospered during the pandemic as shortages caused car prices to soar. The ILA is now making the same case; they say they deserve to share in the profits booked by shippers during the supply chain fiasco caused by COVID-19, when the cost of sending a container from Asia to the U.S. went through the roof. And they want wage hikes to pay for cost-of-living increases experienced under Biden-Harris.
That demand is why, according to a report from Strategas Asset Management, after an initial surge of inflation, there is almost always a “second wave.” Economists at the firm studied “2,100 years of history across 24 countries, [and] … 62 inflationary periods.” In almost 90 percent of the inflation outbreaks, there was a second round of price increases that, on average, came 30 months after the first peak.
Since U.S. inflation peaked at 9.1 percent in June 2022, 27 months ago, we may be close to experiencing that second wave. The dock strike could bring it on.
The UAW and the ILA aren’t alone. American Airline pilots, UPS drivers and workers at Kaiser Permanente and Caterpillar have all pressed to be made whole after seeing real incomes fall; all have received big wage gains. Boeing, which has offered a 40 percent pay raise to striking employees, is the latest employer having to pay up, even though that firm has lost billionsin recent years.
And now the dock workers are making the biggest grab of all. How will these companies pass along the excess costs? By raising prices, which will cause inflation to surge once again.
Americans will not take kindly to another round of higher prices, and could begin to temper their enthusiasm for Big Labor. Gallup reports that approval of labor unions recently touched 70 percent, a level not seen since the 1960s. If the dock worker strike goes on for long, costing the economy billions of dollars each day, causing widespread product shortages and higher costs, that number is likely to sink like a stone.
Meanwhile, Vice President Harris will be left holding the bag if Joe Biden’s embrace of Big Labor batters the nation’s economy. The costs of supply disruptions can be severe, as we saw during the pandemic, and especially to popular small businesses. Large firms have been frontloading orders and stockpiling goods in anticipation of a possible strike; small firms do not have the financial wherewithal to do that.
If and when shortages begin to appear and prices start to climb, voters will hold Harris accountable. All because Joe Biden remains stubbornly in Big Labor’s corner.
https://thehill.com/opinion/white-house/4910999-biden-dock-worker-strike
Published in The Hill
