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A Huge Ripple Effect

Dockworkers' strike would hurt the economy.

September 13, 2002|JACK KYSER | Jack Kyser is chief economist of the Los Angeles County Economic Development Corp.

Dockworkers and their shipping employers are locked in high-stakes contract negotiations over the future of West Coast ports. Hanging in the balance are an increasingly fragile U.S. economy and the 4 million American workers whose livelihoods depend on cargo moving through these ports.

Threatened work slowdowns by the International Longshore and Warehouse Union or an employer lockout could be the proverbial straw that breaks the economy's back. Seven percent of the nation's gross domestic product is directly connected to the West Coast ports. The economy is projected to lose $1 billion a day if the ports are shut down.

At the center of the contract dispute is the issue of technology. Longshore workers fear that technology will cost jobs. In reality, technology could drive job growth by creating efficiencies that would enable the ports to move cargo more quickly and increase capacity to handle the projected doubling of imports from Asia over the next 10 years. More capacity and more cargo would mean more jobs--on the waterfront and nationwide.

Technology on the waterfront is also a mandate in the post-Sept. 11 world. It is the most effective weapon in the battle to enhance port security. By computerizing the movement of confidential cargo information, the federal government is seeking to extend the perimeter of security to ports of origin around the world. Currently, this information is re-keyed by longshore clerks. Efficiencies created by technology also will offset the cost of security measures and create a port complex poised for expansion.

Trade growth is critical to our region's economic future. It is the reason Congress agreed to invest $2 billion in the Alameda Corridor. It was also the rationale for investing billions of dollars in new mega-terminals at the ports of Los Angeles and Long Beach. Modernizing the terminals is the only way to ensure that these investments can deliver their promised return on investment.

How outdated are the terminals on the West Coast? In Long Beach, a trucker can wait up to two hours to enter the terminal, while it takes only 30 seconds in Singapore. Efficient Asian ports can unload and reload a large container ship in about 40 hours, compared with 76 hours in Southern California. The port in Hong Kong, which relies on modern technology, moves four times the number of cargo containers per acre per year than all West Coast ports combined.

Dockworkers are rightfully concerned that technology will eliminate jobs. The Pacific Maritime Assn., representing employers, projects that a maximum of 400 of the union's 10,500 members will be affected by new technology. To soften the blow, the PMA has guaranteed them lifetime job protection. Overall employment is expected to grow once technology is fully implemented by 2006.

It also appears that the employers are willing to pay a steep price for technology on the docks. The offer on the table provides 100% employer-paid health coverage, pension increases, job guarantees and a wage rate that would continue the West Coast longshore workers' status as the royalty of union workers. Average salaries for full-time dockworkers are more than $100,000 a year and are expected to grow handsomely under the new contract.

The employers and dockworkers should keep three things in mind: The first priority is to make sure the ports remain fully operational during negotiations. Work slowdowns, strikes or lockouts are not viable alternatives for a shaky economy. Second, technology is a mandate. Without modernizing the ports, the West Coast will compromise its competitive standing and not realize its potential as an engine for growth. Finally, the two sides should bring these talks to a conclusion. The contract expired two months ago.

Reaching a new labor pact would send an important message to the nation that the shipping companies and the dockworkers are doing their part to support the U.S. economy.

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