The dockworkers strike could cost the economy $3.5 billion a day. Will Biden intervene?

Tens of thousands of dockworkers at ports from Maine to Texas went on strike Tuesday after the contract between the International Longshoremen’s Association and the United States Maritime Alliance expired without a new agreement in place.

That contract covers 45,000 ILA members. Dockworkers are striking over wages—as they call out the rising costs of living and the skyrocketing profits of United States Maritime Alliance (USMX) companies—and issues like protections against automation.

The strike is set to have an enormous economic impact: snarling the nation’s supply chain up and down the East Coast and even leading to backups at West Coast ports. That will cause shipping delays, potentially including deliveries ahead of the holiday season.

Dockworkers strike potential economic impact

By one estimate from J.P. Morgan, the strike at U.S. ports could cost the economy between $3.5 and $4.5 billion a day, though some of that could be recovered once normal operations resume. The strike affects 36 ports from the East Coast to the Gulf, some of which specialize in certain types of shipments.

Philadelphia, for example, is the “go-to port for produce,” giving priority to fruits and vegetable shipments. Ports in Baltimore and Brunswick, Georgia, are among the busiest ports for automobile shipments. The Port of New York and New Jersey is the third-largest in the nation, and the largest on the East Coast, based on volume of cargo, importing everything from future to spirits to plastics to wood. The port of Savannah has the largest refrigerated container terminal in the Southeast, importing and exporting products like poultry, fish filets, and frozen vegetables. As all those shipments are affected, and as the strike continues, consumers could see retail shortages and even higher prices.

What won’t be affected, though, is military cargo and passenger cruise ships. ILA said at the end of September that in the event of a strike, its members would continue to handle all military shipments and work passenger cruise vessels, “to not inconvenience the tens of thousands of Americans who have booked trips in advance.”

Can the government stop the port strike?

It’s a strategic move that the ILA is still working military shipments and cruise ships, says Cathy Creighton, director of Cornell University’s ILR Buffalo Co-Lab, an extension of Cornell’s School of Industrial Labor Relations. Not handling military cargo would almost certainly force President Joe Biden to exercise his power to end the strike. (When it comes to cruise ships, that’s more about appealing to public opinion.)

Under the 1947 Taft-Hartley Act, an amendment to the National Labor Relations Act, there’s the option for the president to step in and stop a strike in a national emergency. That act allows the president to ask the attorney general to go to the Federal District Court and enjoin, or stop, a strike, if it poses a danger to the country’s economic health or safety.

That happened in 2002, when then-President George Bush invoked that law to end a West Coast port lockout. (Unlike a strike, in which workers walk off the job, that situation was a lockout, in which employers prevent their employees from coming to work. Bush asked the federal court to order port operators to end the lockout after 10 days.)

But will Biden intervene?

Already, businesses, manufacturers, and Republican legislators have called on Biden to stop the East Coast and Gulf dockworkers strike. The White House has said it won’t force dockworkers back to work right now. “If things go south for the economy, he may change his mind,” Creighton says. To her, it makes sense that Biden wouldn’t stop the strike yet. For one, it just began. Despite all the talk about the strike’s potential impacts, they are just potential. “It is not actually a national emergency at this juncture,” she says.

Biden may also be hesitant to stop the strike and effectively step on the labor movement’s toes—especially so close to an election. He previously faced blowback from unions when he intervened in the railroad strike in 2022. (Rail workers operate under a separate labor law, the Railway Labor Act, that designates railways and airlines as “critical infrastructure,” and so gives Congress the ability to step in on those labor disputes.) The contract agreement reached between the railroads and the unions after that intervention was only ratified by eight out of 12 unions, and didn’t include paid sick leave, which workers had been fighting for. (They eventually received new sick leave agreements in 2023.)

Invoking the power to stop a strike now, right after it began, would also be “putting a finger on the side of the employer over the employees,” Creighton says. Biden has long been pro-labor, earning a more union-friendly reputation than FDR, according to one historian. “For him to, at this juncture, intervene and stop the strike would be antithetical to what he believes,” Creighton says.

But the fact that Republicans—who have said they’re pro-labor in the run up to the election—are already calling for that intervention shows their “true colors.” “They are less concerned with the workers’ right to improve their conditions of employment and more concerned with employers and businesses, she adds”

Another step for the labor movement

The dockworkers strike marks yet another historic step for a labor movement that has been ramping up since the pandemic. Whether the United Autoworkers or Hollywood writers and actors, workers have secured major wins recently by striking. There’s always a risk to workers: When striking over economic conditions like wages (as opposed to unfair labor practices), U.S. labor law allows striking workers to be permanently replaced.

But low unemployment means there aren’t workers lining up to replace those who go on strike, and though union membership is still low across the country (only 6% of private sector workers are unionized), public support for unions has been growing. During the UAW strike, only 9% of the public sided with the automakers. And during the Hollywood writers and actors strike, 60% of U.S. adults supported that action, with just 17% opposed.

It’s not yet clear how many Americans will support the dockworkers strike, but Creighton says, that “going on strike, generally speaking, has been working. I think that is a lesson that employees around the country have learned, and they’re using that as a tool.”