Unions are only adding to transportation delays and rising costs by stopping work around the world.
Unions are only adding to transportation delays and rising costs by stopping work around the world.
A s labor negotiations between West Coast dockworkers and employers continue with no resolution in sight, a quick glance around the world shows that organized labor in the transportation sector is emboldened and willing to strike.
One major work stoppage so far was in South Korea, where truckers went on strike beginning on June 7. They were protesting a proposed change in wage rules from South Korea’s newly elected president, Yoon Suk-yeol, and the high diesel prices that are making trucking less affordable. Port throughput fell at Busan, a top-ten global port, as truckers left their trucks and sat on the streets. The strike lasted eight days and cost the South Korean economy over $2 billion.
That was not the only transportation strike we’ve seen this year. Europe has dealt with multiple work stoppages, with more potentially in the near future.
On June 23, Germany’s North Sea ports were paralyzed by a one-day “warning strike” over the level of wage increases. The union is demanding a 14 percent wage increase and an annual bonus of 1,200 euros. It also wants the contract to last only for twelve months, instead of the normal 18. That indicates that the union is concerned about inflation being persistent at least over the next two years, since it wants the flexibility to demand wage increases sooner. The strike was only one day, but it resulted in 12 percent of Germany’s shipped goods and 2 percent of global trade being stuck on ships in the North Sea.
That strike comes after prolonged negotiations, and it’s the first major work disruption at German ports in decades. It was only a one-day action meant as a warning, and more strikes could be on the horizon.
The Port of Antwerp-Bruges in Belgium, Europe’s largest export port, saw a one-day strike in late May and another one in mid June. The lack of workers meant that the port’s locks were no longer operating to allow ships to enter.
In the U.K., rail workers have gone on strike twice this year and are set to strike at least one more time. British railroads were sustained by emergency funding during the pandemic that is no longer forthcoming, and they’re looking to cut costs. Workers want a large pay raise to compensate for inflation; the raise that employers have offered so far would amount to a pay cut in real terms. It was the largest rail strike in the U.K. in 30 years, with 40,000 workers walking off.
Pilots for SAS, the flag carrier for Denmark, Norway, and Sweden, are set to strike tomorrow if an agreement is not reached. The airline has been struggling for years and announced a major restructuring plan with significant cost-cutting measures. Unions have not taken to the proposal, and the struggles have continued, with the Swedish government announcing in early June that it would no longer invest in the airline.
Airlines in the U.S. have acquiesced to union demands for major pay raises, with United agreeing to a 14 percent raise for pilots and other airlines looking likely to follow. Airlines are dealing with a shortage of pilots in addition to inflation, so large pay raises may be necessary to retain and expand their workforce. Labor relations for airlines in the U.S. are governed by the Railway Labor Act, which makes striking very difficult.
Work stoppages aren’t just a European and Asian phenomenon, though. They’ve already happened in this hemisphere this year. Canadian Pacific saw a two-day work stoppage in March that had U.S. senators urging a quick resolution so that service would be uninterrupted. Their willingness to strike despite severe consequences for oil and fertilizer, which are two of the commodities most affected by the war in Ukraine, showed that organized labor isn’t afraid of bad press to get what it wants.
Signal and communications workers for Canadian National went on strike beginning June 20. Disruptions and slowdowns were minimal, but the action lasted for days as workers demanded higher pay.
Looking at seaports, dockworkers in Argentina went on strike for 24 hours in late April. And here in the U.S., a labor dispute between the dockworkers’ union and employers at the Port of Charleston has left a new cargo terminal unused. Federal Maritime Commissioner Louis Sola wrote to President Biden, urging him to help resolve the dispute.
What do we notice around the world with labor in the transportation sector? First, they’re taking inflation very seriously. A 3 percent pay raise when inflation is at 1.5 percent is perfectly reasonable, but a 3 percent pay raise when inflation is at 8 percent is not. When inflation around the world was very low for years, employers were accustomed to modest pay raises, which workers will not accept this year. The Wall Street Journal editorial board wrote that the 14 percent raise for United pilots should sound alarms about a possible wage-price spiral.
For the West Coast dockworkers, the wage concern is secondary. They’re already paid exorbitantly, so a few percentage points difference in a wage increase isn’t make-or-break. The larger issue for them is automation, and they’ve long been willing to play hardball to stop it.
Which leads to the second trend we notice around the world: Organized labor isn’t afraid of the larger supply-chain struggles. Unions don’t care that they’ll get bad press for adding to delays and rising costs. The rest of the world is dealing with supply-chain problems as well, and unions have been undeterred, even in places where strikes aren’t common.
With the West Coast dockworker negotiations and rumblings about a rail strike in coming months in the U.S., labor unions are taking notes about how things are going in the rest of the world — and they must be pretty happy with what they’ve seen so far.