The Slatest

What the West Coast Port Fight Means for the Economy, Obama, and Your Next Amazon Order

Ships wait to be unloaded at the Port of Los Angeles in Long Beach on February 13, 2015.

Photo by Mark Ralston/AFP/Getty Images

There is an increasingly dire labor dispute happening at U.S. ports up and down the Pacific coast. To date, the fight between the multinational shipping companies and the American longshoremen that load and unload massive container ships daily has already disrupted billions of dollars in international trade. What happens next could impact everything from the nation’s economic recovery to how long you have to wait for Amazon to deliver your next order—and even whether the cardboard box that shipment arrives in will ultimately be recycled or trashed.

Assuming you don’t spend your days studying labor law and your nights drinking at Delores’ bar, you probably have questions. I certainly did. So I asked and answered them.

OK, first things first, is this going to screw with the new flat-screen television I ordered from Amazon?

Not just yet. But if the dispute continues, Americans can expect some Asian-made electronics and other goods to take a little longer to arrive at their door after they click the buy button, and to possibly have a few less toys in their Easter basket. That’s not going to sink the nation’s $18-trillion economy, but if this fight drags on for awhile or turns into a full work stoppage, it could do serious damage—possibly to the tune of as much as $400 million a day—to the economy, which could hurt stock markets in the short term and alter trade routes in the longer term.

What exactly is the problem?

The overarching dispute concerns the dock workers’ union contract, negotiations over which have been dragging on for nine months. Frustrations over the process have manifested themselves as day-to-day congestion at the ports, with incoming ships that would normally take only a few days to clear the ports instead stuck off the coast for weeks. That’s left agriculture exports to spoil, forced U.S. auto plants to tap the brakes while they wait for foreign auto parts, and made some consumer goods a little harder to come by.

Exactly who is to blame for that gridlock depends on whom you ask. The shippers say the longshoremen are intentionally doing their jobs as slowly as they can, causing shipments that normally adhere to tightly scripted schedules to be thrown into limbo. The union, meanwhile, denies the longshoremen are doing anything out of the ordinary and instead blames the logistical nightmare on shippers’ decision to cut back on night, weekend, and holiday shifts. The shippers, meanwhile, admit they’ve cut shifts but say they’d be crazy not to since they were paying overtime wages and not even getting regular-time’s worth of work for them. The long-simmering fight reached new heights last week when the companies suspended loading and unloading at some ports for four full days over Presidents’ Day weekend.

Timeout. Wasn’t Presidents’ Day a three-day weekend?

Maybe for you. But, according to the New York Times, the union’s contract mandates that both Lincoln’s birthday and Washington’s birthday be treated as holidays.

Nice! So what is the major sticking point here? It’s all about money, right?

Yes and no. Yes, in the sense that all economic negotiations, in one way or another, are about money. No, in the sense that the main beef in the ongoing contract negotiations isn’t specifically about longshoremen’s wages or benefits. The two sides are said to have already hashed out health benefits and agreed to what jobs the union can retain in the future, and they also appear relatively close on the issue of wages.

Instead, the major remaining hurdle concerns the actual process by which things like the current slowdown and other labor-management conflicts are mediated. Under the current contract, the arbiters who help solve such disputes effectively get to serve a life-term once appointed. The union, however, wants to change it so that either side can dismiss an arbiter after each contract (which typically span 5-6 years) expires. In fact, the union seems to have one very specific arbiter in their crosshairs: David Miller, a man who has arbitrated grievances in Southern California since 2002, and someone the union apparently thinks is too close with the shippers.

So, how do things look right now?

It’s tough to tell. A third-straight day of negotiations in San Francisco ended late Thursday night without a deal, according to Reuters. But there have since been rumblings of progress, and at least one false report of a deal. President Obama dispatched Labor Secretary Tom Perez to California earlier this week to put pressure on both sides but the immediate returns weren’t exactly promising. On Wednesday, negotiations that had been happening behind closed doors spilled into public view when the shippers sidestepped the union entirely to deliver what they vowed was their “last, best and final” offer directly to the dock workers. That move no doubt infuriated union leaders and brought with it the specter of a full-on labor stoppage at the 29 ports in question, which together handle about $1 trillion worth of goods each year. Perez is now threatening to move the talks to Washington, D.C., if a deal doesn’t get done soon.

Does “move the talks to Washington, D.C.” mean “get Obama to put an end to this dispute”?

Since work continues at the ports—albeit slower than everyone would like—Obama can’t actually wield his executive authority to put an end to the dispute. Under U.S. labor law, he can’t step in unless the workers go on strike or the companies impose a lockout. So far, neither side has been willing to suffer the financial and public-relations pain that would bring, although the shippers appear more likely to eventually bite that bullet. “A lockout is a last resort—nobody wins,” James C. McKenna, the president of the Pacific Maritime Association, the group negotiating on behalf of the owners, told the Times earlier this month. “But at some point in time, this thing will grind itself to a stop, and I wouldn’t take anything off the table.”

What happens if that threat become a reality?

If the shippers do go the lockout route they would hand Obama a hammer to break the impasse. Under the Taft-Hartley Act of 1947, the president has the power to ask a court to end a lockout or strike if he thinks it constitutes a national emergency. George W. Bush did just that in 2002 after the shippers locked out workers at these same West Coast ports over a similar slowdown.

So the president will just do that, then?

He may have to, but he’d rather not. A Republican president can typically step in and short circuit a labor fight without risking political blowback from his base. It’s an entirely different thing for a Democratic president given the party’s long ties with the labor movement, and the fact executive action in these cases tend to favor the employer over the employees almost by default. If Obama does force an end to the labor dispute, he’d be the first Democratic president to do so since Jimmy Carter ended a coalminers’ strike in 1978.

Making an already complicated decision that much more so for Obama is the reality that he doesn’t have tons of goodwill to burn when it comes to labor. As Brian Mahoney at Politico has pointed out, unions remain skeptical of the president, partly because pro-labor issues were largely missing from his first-term agenda and partly because of the president’s current advocacy for the Trans-Pacific Partnership international trade deal, which unions generally oppose. During his State of the Union last month, Obama called for “laws that strengthen rather than weaken unions, and give American workers a voice.” That sales pitch takes a hit if he turns around this month and undercuts union negotiations at the ports.

Why would an end to the labor strike automatically favor the businesses?

It wouldn’t necessarily, but (very) generally speaking any end to a labor fight typically preserves the status quo, and the status quo traditionally benefits the employer not the employee.

Is there any way the dock workers will strike?

Anything’s possible, but a strike seems highly unlikely. The International Longshore and Warehouse Union is, relative to other American unions, quite powerful—but that power comes with its own set of drawbacks. Their leverage largely resides in the fact that the ports—which handle anywhere between 10 and 15 percent of the nation’s GDP—represent a chokepoint for American exports and imports. That allows the union to be aggressive at the bargaining table, but not too aggressive. A strike, like a lockout, would force Obama’s hand.