Remember that big labor slowdown at the West Coast ports, including the ports of Los Angeles and Long Beach, that lingered for four months late last year and early this? The one that left time-sensitive goods sitting in ships, forced some manufacturers to fly parts by air at 10 times the normal expense and cost retailers nearly $4 billion? The one that left produce rotting on the docks, made McDonald’s ration French fries in Japan and deprived U.S. agriculture of $1.75 billion in exports each month?
What was that all about anyway?
If you said “wages and benefits,” you’d be a little bit right. However, those and some other issues got settled pretty quickly. (The base wage for dockworkers will rise by $6.50 an hour to $42-plus over the five-year contract, and the employers will pay the Cadillac tax for the union workers’ medical plan. The final agreement was signed May 22.)
But mostly, the crippling work slowdown dragged on because of a personal dispute. Some union chiefs didn’t like the arbitrators who settled everyday workplace disputes in Los Angeles and Oakland, and they wanted the arbitrators fired. The companies that operate at the ports didn’t want to let union-friendly arbiters decide every disagreement, so they resisted. Both sides dug in and a cycle of tit-for-tat retaliations began.
The work slowdown didn’t get settled until Labor Secretary Tom Perez came in and brokered a deal early in February. The main feature: The arbitrators were dismissed, and going forward, a panel will hear workplace grievances instead of an arbitrator.
Yeah, that’s what it was mostly all about.
At the risk of sounding like Captain Obvious, it’s stupid that East-West commerce came to its knees and billions of dollars were lost over a matter so piddling that it should have been dealt with in a few hours, if not minutes.
But this is the system that we’re stuck with. The ports of Los Angeles and Long Beach are owned by their respective cities and overseen by them, and the political leaders are obliged to the unions that work there. So if some union boss doesn’t like someone, the whole import-export system may seize up until his itch is scratched. The rest of the world may wonder what we’re thinking, but this is the system that the political types apparently want.
Bill Mongelluzzo, senior editor of the Journal of Commerce, looked back over the labor problems, damaging slowdown and new contract, and concluded that the whole affair was a bit mysterious and disappointing.
“Since there is nothing in the new contract that threatens the earnings, benefits or job security of West Coast longshoremen … it is disconcerting that the negotiation process dragged on for so long, and that the work slowdowns and employer retaliation efforts resulted in virtual gridlock at the ports for four months beginning in early November,” he wrote last week after the final agreement was signed.
The “need for change” is something everyone talks about and agrees to, at least in the abstract. But there is no talk of serious or fundamental change. Instead, most of the postagreement talk seems focused on small improvements; i.e., the need to start negotiations sooner, the need for more open communication, etc.
Who knows? Those kinds of incremental improvements may help. All we can do is hope, because there is no political will for a meaningful, fundamental change.
And lacking any big change, this is the system we’re stuck with. The next port contract comes up in four years.
Charles Crumpley is editor of the Business Journal. He can be reached at email@example.com.
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