Why the Dockworkers Strike Could Impact You | FACTS Ep. 18
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Right now, 45,000 dock workers on the East and Gulf Coast are ready to strike over wages and the automation of jobs. These ports handle half of the nation's cargo. We're talking big consequences, delays, shortages, economic slowdown, the whole nine yards. That's on top of the fact the U.S. ports are already some of the least effective ports in the world. U.S. ports are open fewer hours, they're less automated than other ports. Underemployment at the ports is a condition of many union contracts.

All of this is designed to artificially boost wages at the ports by essentially taxing American consumers indirectly. And yet we're told by the Biden-Harris administration that unions are a godsend, that they built the country and the middle class. You better thank a union member for... You better thank a union member for paid...

Case is more complicated. Unions have sometimes been effective and necessary instruments in attaining better working conditions and pay for labor. But they've just as often been a leading factor in making industries inefficient, bloated, uncompetitive, and they've been linked time and again with corruption and violence. Let's just examine the history of strikes. ♪

Strikes in America go way back, back to the Industrial Revolution, when workers first organized to demand better wages and working conditions. Early strikes were often spontaneous and chaotic, sometimes leading to violent clashes with employers and even the police, and they were seen as dangerous threats to both business and public order.

The Great Railroad Strike of 1877 was the one that started it all. This was the first major strike in American history, and it was enormous. The US was still recovering from the financial panic of 1873, and railroad companies were slashing wages, an appropriate response to high levels of unemployment and declining revenues. In July 1877, railroad workers in West Virginia walked off the job. The strike spread like wildfire. Baltimore, Pittsburgh, Chicago, St. Louis. Soon, 100,000 workers were on strike across the country.

They didn't just walk off the job, though. They used force to stop railroads from operating, targeting strikebreakers from working, too. Coal miners also joined the strike. In Pittsburgh, a mob burned down some 40 buildings, as well as 1,200 freight cars. In response, the federal government sent in troops to put down the strikes.

President Rutherford B. Hayes had sympathy for the workers, but he understood that agitators had turned strikes into something larger, a threat to free markets and an operative economy. In his diary, he wrote, Can't something be done by the education of strikers, by judicious control of the capitalists, by wise general policy to end or diminish the evil? The railroad strikers, as a rule, are good men, sober, intelligent, and industrious. Every man has a right to refuse to work, but no man has a right to prevent others from working.

Violence erupted. By the time it was all over, more than 100 people were dead. The strike did not achieve its immediate goals, but it showed the power of organized labor and sent alarm bells ringing. Both government and industry took notice.

Fast forward to 1894 and the Pullman Strike, one of the most significant labor actions in American history. The Pullman Company, which manufactured railroad cars, slashed workers' wages without lowering the rent in the company-owned housing where the workers lived. The company was, at the time, manufacturing Pullman cars at a loss in order to keep workers employed. Enter Eugene V. Debs and the American Railway Union, the ARU. The ARU called for a strike, and that spread across the nation.

Soon, 250,000 railroad workers were refusing to move Pullman cars and the nation's rail system came to a grinding halt. Once again, the ARU used compulsory methods in order to enforce the strikes.

Strikers surrounded the Pullman factory, preventing anyone from breaking the strike. Many of these mobs, by the way, were unrelated to the actual unions. The Brotherhood of Trainmen, for example, issued a statement lamenting the strike and stating it was called by delegates who, quote, "...did not represent one-thirtieth of the employees in train service in the United States, but every man, woman, and child employed in any capacity on a railway is expected to bow to this imperious command, regardless of any rights of their own, obligations to other organizations, or contracts with their employers."

President Grover Cleveland invoked the Sherman Antitrust Act, the same one used to break up monopolies, to justify sending in federal troops. The strike was crushed. Debs was arrested. This event did lead to the establishment of Labor Day as a national holiday in an attempt to appease laborers after the conflict. State holidays for Labor Day had already been established in 22 states by 1894.

In 1902, the federal government, for the first time, took up the role of labor mediator rather than law enforcement agency tasked with preventing violence. When strikes at the coal fields in Pennsylvania threatened the entire national supply of coal in winter, including by use of violence against would-be strikebreakers, President Teddy Roosevelt personally stepped in and tried to broker a deal. Indeed, Samuel Gompers, head of the American Federation of Labor,

considered TR's personal intervention the first step toward full-scale government neutrality with regard to unions. He wrote, quote, Several times I have been asked what, in my opinion, was the most important single incident in the labor movement in the United States, and I have invariably replied, the strike of the anthracite miners in Pennsylvania. From then on, the miners became not merely human machines to produce coal, but men and citizens. The strike was evidence of the effectiveness of trade unions.

Next up was the Bread and Roses strike of 1912. In that year, textile mills in Lawrence, Massachusetts slashed wages when a new law shortened the workweek. Employers forced to employ more workers because of the lower hours reduced pay, so workers struck. The slogan the workers used to represent themselves, Bread and Roses, symbolized the workers' demands. Not just for better pay, bread, but for a better quality of life, roses. The strike lasted for over two months and

It was brutal. Workers destroyed machinery and attacked strikebreakers. Both police and militia were called in. After mothers began shipping their own kids out of Lawrence to New York to get them away from the conflict, the media coverage won the attention of President William Howard Taft, who tasked his attorney general with investigating the mills. The findings regarding working conditions were so shocking, the mills gave in to labor, giving them a wage increase and better working conditions. Nonetheless, the pattern of violent striking continued to threaten the nation's comedy. By the 1930s, the Great Depression brought labor issues into sharp focus.

Now, under FDR, the unions would be treated as a full partner with the federal government. FDR saw what his predecessors did not, that an alliance with union leaders would be a political win. It would also give the federal government extraordinary power over business. Cue the National Labor Relations Act of 1935, also known as the Wagner Act.

The NLRA, passed during FDR's New Deal, gave workers the legal right to form unions, bargain collectively, and strike. It also established the National Labor Relations Board, the NLRB, to oversee disputes between employers and employees. The Wagner Act was a major win for labor unions. It forbade employers from firing workers for union activity.

and forced employers to negotiate with union representatives. The Wagner Act could force workers to join a union and force to pay union dues to get or keep their jobs. In the words of historian Burton Folsom, the Wagner Act certainly weighted the scales toward labor. The result was a massive increase in union membership.

Strikes like the Flint sit-down strike of 1936 were also pivotal in gaining public support for organized labor. On December 30th, 1936, workers at General Motors in Flint, Michigan launched a sit-down strike. This wasn't your typical strike where workers simply left the plant. Instead, they occupied the factory itself, refusing to leave until their demands were met. By doing this, they prevented GM from bringing in replacement workers, commonly known as scabs, to continue production.

The workers were organized by the UAW, the United Auto Workers, a relatively new union at the time. Their demands were clear. Better wages, improved working conditions, union recognition. Things heated up on January 11, 1937, in an event now known as the Battle of Running Bulls, bulls being a slang word for the police. GM, with support from local police, tried to forcefully remove the strikers. Tear gas was fired into the plant. Armed police surrounded the factory. But the workers fought back, hurling car parts and using fire hoses to keep the police at bay.

After several hours of fighting, the police withdrew. The Flint sit-down strike quickly garnered national attention. FDR and the New Deal administration were sympathetic to labor, but they were also wary of the strike's economic impact. GM was the largest automaker in the country, and a prolonged strike threatened the entire U.S. economy. Behind the scenes, the federal government encouraged negotiations, but FDR stopped short of direct intervention. These tactics are now echoed in Joe Biden's handling of the current crisis at the Doct. After 44 days, GM finally agreed to recognize the UAW as the sole bargaining agent

for its workers. The strike ended on February 11, 1937, with GM conceding to many of the workers' demands, including improved pay, working conditions, and the right to unionize. The UAW's victory was a major milestone for labor unions across the United States, signaling a shift in the balance of power between workers and employers. The entire auto industry was soon unionized.

Now, the wages of that unionization would be the future collapse of nearly the entire American auto industry in the 1970s, as worker pay and conditions far exceeded market levels, making the American auto industry inferior to foreign competitors like, say, Toyota.

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Under Harry Truman, while striking that could politically harm Democrats was acted against, unions were generally appeased. In 1946, the United Mine Workers, led by the infamous John L. Lewis, called for a strike demanding better wages and conditions for coal miners. Now, coal was the fuel source for the U.S. economy at the time, so the strike posed a massive threat to the country's post-war recovery. Truman seized the coal mines under federal control and then cut a deal between the UMWA and the coal mines. This was a huge show of strength for organized labor,

proving that even after the war, workers had serious power. But there was backlash. Because union power was at an all-time high, strikes had become pretty common, sometimes in essential industries like coal, steel, and railroads. Business leaders and Republicans saw unions as too powerful, and there was growing unjustified fear of communist influence within the labor movement.

Enter the Taft-Hartley Act of 1947, officially known as the Labor Management Relations Act. President Truman strongly opposed Taft-Hartley, referring to it as a slave labor bill. He believed the law would weaken unions and roll back labor rights granted under the Wagner Act of 1935. Truman argued the act was a dangerous infringement on the rights of workers and would tilt the balance too far in favor of employers.

He vetoed the bill on June 20, 1947, with a message to Congress condemning the bill as an overreach that would harm labor relations and free speech. Despite Truman's efforts to prevent the passage, Congress had enough support to override the veto. The Taft-Hartley Act was designed to balance the scales, restricted union activities for

forbidding jurisdictional strikes, wildcat strikes, and so-called secondary boycotts, where unions would refuse to handle the goods of businesses they weren't directly striking against. It also banned closed shops, where employers could only hire union members, and allowed states to pass right-to-work laws, meaning employees could choose not to join a union even in unionized workplaces.

Taft-Hartley also gave the federal government the power to intervene in strikes if they posed a risk to national health or safety. Presidents from Truman to George W. Bush have invoked this power, making Taft-Hartley one of the most impactful pieces of labor legislation in American history.

In the years following Taft-Hartley, union membership in the private sector slowly began to decline. Laws like Taft-Hartley made organizing more difficult. As globalization grew, industries like manufacturing, once union strongholds, began to shrink, largely as an effect of union contracts that made products too expensive.

By the 1980s, under the Reagan administration, we saw the famous PATCO strike, where striking air traffic controllers were fired, further signaling a decline in union power. Decrying long hours, intense pressure, and supposedly outdated technology, after negotiations with the federal government failed to produce agreement, 13,000 air traffic controllers went on strike. Under the Taft-Hartley Act and the Federal Labor Relations Act, federal workers are legally prohibited from striking. By

By going on strike, Patco essentially brought air travel across the U.S. to a near standstill. But two days after the strike began, President Ronald Reagan issued an ultimatum: "Go back to work within 48 hours or you're all fired." "I must tell those who failed to report for duty this morning, they are in violation of the law. And if they do not report for work within 48 hours, they have forfeited their jobs and will be terminated." A lot of people thought it was a bluff. After all, the country depended on air traffic controllers.

But Reagan, as it turned out, was serious. When most of the striking workers refused to return to their jobs, Reagan followed through on his threat. On August 5, 1981, Reagan fired over 11,000 air traffic controllers. Not only that, he banned them from ever being rehired by the federal government. This is a huge moment. It sent a strong message that the federal government would not tolerate strikes by federal employees, and it showed Reagan's commitment to breaking public sector union power. Reagan brought in military controllers and supervisors to keep the air travel going.

For the labor movement, the Patco strike was devastating. It was a crushing blow to public sector unions and emboldened employers to take tougher stances in labor disputes.

Over the next few decades, union membership in the United States sharply declined, especially in the private sector. But the public sector was a different story. In 1962, JFK had signed an executive order opening the door to public sector unionization, the ability of government employees to strike against the government. Even FDR had seen such an idea as anathema to good government. This would mean workers paid by the taxpayer could strike against the taxpayer. There'd be no one to bargain against them.

Public sector unions had been allowed before the executive order, but now public sector employees could be forced to allow a union to represent them in negotiations. Copycat legislation was soon promulgated across a variety of states. This is why today only 6% of the private sector is unionized, but 32% of the public sector is. It's also a reason why the private sector is way more efficient than the public sector.

private sector strikes haven't ended, of course. In 1997, the Teamsters Union led a strike against UPS involving 185,000 workers, making it the largest strike in the U.S. in decades. The workers were fighting against the increasing use of part-time, lower-wage jobs. They wanted full-time work with benefits. Public support for the strike was significant. People sympathized with the workers' demands for job security. After two weeks, UPSK, agreeing to more full-time positions and better benefits, a significant win for labor. And the

And there was the John Deere strike of 2021. 10,000 workers at John Deere walked off the job, demanding higher wages, better retirement benefits, and improved working conditions. After five weeks, John Deere agreed to a new contract with significant wage increases and better benefits. This strike has been seen as part of a resurgence in recent labor activism. There have been significant walkouts and protests at Amazon in recent years. During the COVID-19 pandemic, workers in several Amazon facilities walked off the job, demanding better safety protocols, hazard pay, health benefits.

The strikes have spurred unionization efforts, particularly in places like Bessemer, Alabama, and Staten Island, New York. Although many of these efforts have been unsuccessful, given that most private sector employees understand that unionization will result in companies like Amazon simply moving their labor base elsewhere.

Though not a single coordinated strike, the Starbucks unionization movement spread rapidly in 2022, with baristas at stores across the country organizing for better pay, improved working conditions, more predictable schedules. In many locations, workers staged walkouts and strikes to protest what they said were unfair labor practices. The movement continues today, and more stores are voting to unionize. And, of course, who can forget the highly publicized Hollywood Writers Guild strikes in 2007, 2008, and 2023, the latter aligning with the SAG-AFTRA Actors Strike.

Both strikes resulted in pay increases as new media platforms evolved, but they also caused significant production halts. The 2007-2008 strike even contributed to the rise of reality TV due to the demand for non-scripted content. So,

So how does all this relate to what's happening right now? Well, right now, approximately 45,000 dock workers represented by the International Longshoremen's Association are preparing to strike if a new contract isn't secured before the current one expires on September 30th. That strike would hit 36 ports, which handle about half of the nation's cargo from Texas to Maine. The dispute centers on two major issues, wages and the automation of port operations. If

If the strike happens, the consequences will be felt across the globe. U.S. East and Gulf ports handled 28.4 million TEUs, that's 20-foot equivalent units, of containerized cargo in 2023. Every week of the strike could tie up 1.7% of the global container ship fleet, leading to backlogs, shortages, and price increases.

Sports in Canada, like Halifax and Montreal, are already preparing for a surge in traffic, but logistical challenges like longer transit times and bottlenecks at border crossings will make it difficult to absorb all the diverted cargo. This would totally screw up the economy. We're talking billions in lost revenue, shipping backlogs, disruptions in supply chains. And remember, the holiday season is approaching. If this strike drags on, it could cause real problems for businesses and consumers.

As we've seen in numerous strikes across American history, the current President Joe Biden could step in. Under the aforementioned Taft-Hartley Act, the President has the authority to impose an 80-day cooling-off period. Essentially, he can say, hold up, everybody. Everyone back to work while you hammer out an agreement. The law was designed to keep the economy running during major labor disputes that threaten national security or the public's health and safety. But Joe Biden is choosing not to use this power. Why? Well, because the Biden administration has

has made it clear they're not interested in breaking any strike. A White House official even told Reuters, we've never invoked Taft-Hartley to break a strike. We're not considering doing so now. Instead, Biden is encouraging both sides to stay at the bargaining table, which is him putting pressures on the employers to stop to the unions. It's an attempt to

to win their votes. After all, every election cycle, unions donate billions of dollars to Democrats. Joe Biden is the first president to have actively joined a strike line. The cost to Kamala Harris, though, could be serious. If the economy stalls out in the weeks before the election, Kamala will be the one to pay the price. If the economy tanks, Harris would have to face the fallout. That's the kind of thing that could doom a campaign. ♪