Links - 9th October 2024 (1 - Left Wing Economics: Longshoremen Strike)

Richard Hanania on X - "The International Longshoreman's Union is demanding not only higher wages, but "a total ban on the automation of cranes, gates and container movements that are used in the loading or loading of freight at 36 US ports."  Why don't they just call for banning containers all together? They should be able to carry every single product that arrives in port by hand. Think of all the jobs that would create!  Port workers already make $39 an hour. With overtime and benefits, some make over $200,000. The pay is not that big of a deal from a societal perspective, it's the fight against modernization. This is why the US has some of the worst performing ports in the world.   Analysts worry that if Canada and Mexico move ahead shipping will go there. Everything will get more expensive, and some products simply won't be available.   Please do not support labor unions. Whether you are on the right or left, think carefully about effective ways to uplift humanity, instead of letting one small group hold the rest of the country hostage and permanently cripple the American economy." Opinion | Biden’s Longshoreman Strike - "President Biden wants unions to have extortionary bargaining power, and he’s getting a demonstration of it on election eve. Congratulations... The strike at these ports is the first since 1977 and could cost the U.S. economy as much as $4.5 billion a day according to J.P. Morgan. Many businesses have stockpiled inventory in recent months and made plans to divert shipments to West Coast ports. But some perishable products can’t be diverted, and West Coast ports are overwhelmed. Businesses last week urged the Administration to intervene to head off a strike, but Biden officials took the side of the longshoremen. “This weekend, senior officials have been in touch with USMX representatives urging them to come to a fair agreement fairly and quickly—one that reflects the success of the companies,” White House spokesperson Robyn Patterson said Sunday. This echoes the union’s line that port employers need to pay up because they are profitable. Most workers would jump at the 50% pay increase that USMX has offered over six years. But the ILA is demanding a 77% pay raise to $69 an hour—which is more than West Coast longshoremen, who earn roughly $233,000 a year on average in wages and overtime, plus $99,474 in benefits. The ILA is also demanding bigger “container royalties,” which is a union welfare program that pays longshoremen regardless of whether they work. About half of the union’s members work on any given day owing to technology that has improved port efficiency. The ILA is also demanding a wholesale ban on automation. American ports are less efficient than most in the world owing to union work rules and restrictions on automation. Unlike other private unions, longshoremen don’t have to worry that their demands will bankrupt employers or cause them to lose business. Volkswagen can’t import European-made cars by truck. U.S. businesses and consumers foot the bill for higher port labor costs and reduced efficiency. So much for the Administration’s boasts about fighting inflation and bolstering supply chains. Mr. Biden could invoke the Taft-Hartley Act to force a cooling-off period for more negotiations, as George W. Bush did in 2002 to end an 11-day walkout at West Coast ports. But Mr. Biden said Sunday “I don’t believe in Taft-Hartley.” He won’t upset his union allies and their voter turnout operation. The ILA is exploiting its leverage with the labor-friendly Administration to pressure the ports to cut a rich deal to avoid economic pain before the election. That also seems to be the strategy of Boeing machinists in the Pacific Northwest who are heading into their third week of strike after rejecting a 30% pay increase over four years. Boeing machinists want a 40% wage increase plus a restoration of defined-benefit pensions that were scrapped a decade ago. The company has offered $9,360 a year in 401(k) contributions, which is far more than most private employees receive. Its offer is especially generous given Boeing has lost more than $25 billion over the last six years. Machinists may be hoping their Biden allies will apply regulatory pressure on the manufacturer to cough up more. The Transportation Department has enormous leverage over Boeing since it must certify planes. This may also be the strategy of 5,000 striking Textron workers in Wichita, Kan., who make Beechcraft and Cessna planes. Machinists voted on Sept. 21 to reject Textron’s offer of a 26% wage increase over four years along with $1,500 annual cost-of-living adjustments and $3,000 lump-sum payments, plus a 9% employer 401(k) match. Striking workers at UPS, Caterpillar and U.S. automakers have won rich labor contracts in the past two years, only for the companies to trim their workforces or shift production to Mexico. A strike by longshoremen will do broader economic damage, but this is the result of the greater union leverage that Mr. Biden and Kamala Harris want. This strike, like many others, is made in the White House." Dave Jamieson on X - "With a port strike looming, here's ILA President Harold Daggett talking about the economic damage he's willing to inflict. "In today's world I'll cripple you. I will cripple you and you have no idea what that means." (Wife thought I was watching a movie)" @jason on X - "With this video, Harold Daggot has done more damage to unions than Jimmy Hoffa and Lee Kuan Yew — combined.   Threatening fellow Americans with losing *their* jobs if “his guys” don’t get a 77% raise while average Americans try to keep up with inflation is the peak of cutthroat behavior.   Disastrous approach.  The obvious strategy: give him what he wants in the short term, then automate everything you can and break the monopolies these unions have over our economy so he can never make good on his threats." Thread by @tomaspueyo on Thread Reader App – Thread Reader App - "Every American is poorer because of longshoremen's position.  The worst is not the $1½-5 Billion per day the strike would cost the US economy.  The worst is not their outsized salaries. It's not even the known ties they have with organized crime, or their extraction of rents for work they never did. The worst part is that they increase transportation costs, which destroys the wealth of every American, making us way poorer.  As this tweet explains, longshoremen get hefty fees every time they touch a container. As a result, shipping avoids "touches". But road transportation is waaay more expensive than water transportation—up to 10x more. These increases in transportation costs seem like not a big deal, but the impact is massive. Because here's the key: doubling transportation costs can reduce wealth by 90%:
• If you 2x transportation costs, you divide by 4x your potential markets
• But network effects grow with the square of nodes. 4^2=16
Doubling transportation costs can reduce trade potential by 16x! A 16x reduction is a 94% reduction in wealth. Of course, the full 16x is not achieved in reality, and also now transportation costs are low enough that they aren't an obstacle to all types of trade.  But the impact on trade is massive, and hidden: You don't know how much trade never happened because transportation costs were too high! So you should be irate when you hear that the productivity of "Other transportation and support activities"—which includes marine cargo handling—has declined by 29%. The most outrageous part is not the rent-seeking behavior of asking for a 77% increase in salaries—an ask they can only do because they have a monopoly. The worst part is that they're blocking automation. Every industry automates to make everything cheaper and get more business. But when you have a monopoly, you don't care. You abuse it. The worst part is they should be looking forward to it, because, as they say, the work is back-breaking! The worst part is that it would be better for longshoremen over the long term! More productivity➡️Cheaper service➡️More business! It should be a national mandate to allow port automation" Richard Hanania on X - "Unions in the 1950s originally opposed container shipping, which reduced the cost of shipping from $6 to 16 cents a tons. Today they oppose further automatization. The union is arguably acting in its interests, but the interest of the rest of humanity is to crush them."
Why are left wingers so afraid of change and progress? So much for mocking luddites Robert Sterling on X - "Basically, there’s a group of guys called longshoremen, who unload all the stuff that comes into the country by boats (which is pretty much everything you buy, right?). The longshoremen all make more money than doctors, because their union has a legal stranglehold over the ports and their mob-connected boss is willing to cripple the American economy to get them even more money. So when you hear longshoreman, think “boat unloading guy making shitloads of money.” The union is paranoid about automation destroying their jobs, though, since robots can unload containers 5x faster and for 1/100th the cost, and also without threatening to wreck the economy and make inflation worse one month before an election and six weeks before the holiday season. Still with me? Good. Now pour me another glass of champagne and let’s talk about something called the Taft-Hartley Act." Richard Hanania on X - "Harold Daggett, head of the longshoreman union, is upset about E-Z Pass because he wants union men there collecting tolls by hand.  He recalls that it started with one lane automated, and then people waiting at the manned toll booths realized that they should all be automated.  His lesson from this story is that everyone should’ve been permanently forced to wait in traffic so there could be more union jobs! You can’t even start on the road to automation, because it will make everyone realize how much better things can be.  Unbelievable.  He seems too stupid to realize that being on the side of traffic jams is probably not the best PR.  We should be thankful union bosses are so dumb, as thugs tend to be." Bill D'Alessandro on X - ""Oh we don't want much, just a 77% pay increase and a contractual ban on all automation, forever, at all US ports."  The Longshormen's Union is a vampire squid on our economy, and their pending strike will absolutely increase the cost of everything from cars to asparagus:  "150,000 pounds of asparagus will fly in from Peru that would usually arrive by ocean, to avoid the risk of the vegetables getting stuck at sea and rotting. Air freight is 4X more expensive, and will add about 50 cents a pound to the cost of asparagus."  US ports are already about HALF as efficient as leading international ports, because the Longshoremen have been blocking efforts to implement automation for years.  The cost of that inefficiency is passed along to consumers every day. And the union is now striking to make it even worse.  This is rent seeking of the worst kind, a regressive tax on low income consumers (who spend the highest portion of their earnings on goods impacted by these costs), and we should absolutely not tolerate it." Alec Stapp on X - "Opposing automated ***gates*** is such an absurd position to take. Without technology and automation, humans would still be living in the Stone Age."
Marc Andreessen 🇺🇸 on X - "Paraphrasing Milton Friedman: "Why not maximize employment by digging holes with spoons?"" Crémieux on X - "America's ports are so bad that the gains to port automation are enormous. They're so large that increasing an average port's capacity by just one ship increases total trade by 0.67%."