Longshoreman Strike: Should Obama Act As Mediator to Keep Ports Open and the Economy Alive?

A Saturday negotiation deadline between the International Longshoreman’s Association (ILA) and the U.S. Maritime Alliance was temporarily averted with a 30-day extension.

The impending shut down had President Obama caught between a rock and a hard place. The ILA was threatening to go out on strike, a move that would shut down the East Coast and Gulf Coast ports including the Port of New York and New Jersey. A shutdown would undoubtedly throw the nation’s economy into turmoil and send us barreling towards the fiscal cliff. Obama is faced with the decision of intervening as a mediator and interfering in the normal course of market labor negotiations, or sitting back and possibly alienating big labor, a large part of his constituency.

As critical as this event may be, Obama should resist any pressure to invoke the controversial Taft-Hartley Act. The act known as the Labor-Management Act places limits on labor (e.g. the ability to strike) and was drafted to act as a counterbalance to the pro-labor National Labor Relations Act. A president can use the act if he feels that a strike or lockout imperils national health or safety. It was last invoked in 2002 by President George W. Bush to reopen West Coast ports after an eleven-day shutdown.

Invoking the act would artificially tip the negotiating scales in the favor of management. The port operators would no longer be under any financial pressure to negotiate in a timely fashion. The act would force workers to return to work at standard/normal production levels or face financial sanctions. If the unions failed to comply Obama could use the National Guard and/or the military to open, man and secure the ports.

Rather than getting directly involved Obama can continue to allow the Federal Mediation and Conciliation Service to act as mediators and if necessary he can send in Department of Labor Secretary Hilda Solis to represent the administration.

A major labor strike is the last thing Obama needs at this point. His budget deal with Congress has failed and the country is facing an automatic tax increase, suspension of extended unemployment benefits and massive spending cuts if a deal is not reached by the New Year. If an extended shut down of the eastern and Gulf coast ports is added to that mix then the country will not fall off the fiscal cliff it will take a running leap.

At stake are millions of jobs and hundreds of millions of weekly income and economic growth. The Port Authority of New York and New Jersey alone generates an “estimated $136 million a week in personal income and $110 million in economic output.” 550,000 Floridians depend on the ports for their jobs.  “Savannah, the nation's fourth-busiest container port, and Houston, the busiest on the Gulf Coast, would have also been affected.”

This could be another one of those defining moment for the president. Negotiating has not proven to be his forte. But in this situation, if necessary, he will have to strike the proper balance between broadly doing what is best for all Americans and narrowly doing what is best for his political base. Before making that decision he will have some time. In December 2012 the largest U.S. ports, Los Angeles and Long Beach, ended an eight-day strike. Proponents on both sides had called for presidential intervention, but Obama stayed out and the two sides settled on a new four year contract.