The announcement by Kate Gibson, writing at Marketwatch, was typically light and polite: are planning to shut down ports on both coasts of the United States if they don’t get their way:

Dock workers are readying to strike next weekend along the East and Gulf Coasts in a labor dispute that threatens shipments of retail goods, food and components used in manufacturing…

Central to the dispute are so-called container royalty fees, or levies on cargo that supplement wages, with employers looking to cap the payments and the union declaring them to be off-limits.

As usual, there is much more to it than that. Gibson makes it sound as if management is holding the hostage over their “reasonable” demands. If the strike is held, cargo including frozen foods, clothing and household goods would sit in the holds of cargo ships until management meets their demands. The last time the union struck it cost the U.S. economy an estimated $1 billion every day.

has weighed in on this for nearly a year and provides much more insight into what’s really going on:

It’s not about jobs. It’s not about safety. It’s not about improving dockworkers’ living standards. The looming, long-planned East and Gulf Coast port strikes are about protecting Big Labor’s archaic work practices and corrupt waterfront rackets.

The International Longshoremen’s Association (ILA) has a virtual stranglehold (I wonder how that happened?) over all the ports on the Atlantic and Gulf Coasts, and could push the economy into recession, if it isn’t there already:

The International Longshoremen’s Association’s (ILA) grip extends from to to Florida and all points across the Atlantic and Gulf Coasts. The New York-New Jersey ports — which handle cargo valued at $208 billion — could come to a standstill.

National Retail Federation executive Jonathan Gold issued a desperate statement: “The last thing the economy needs right now is another strike, which would impact all international trade and commerce at the nation’s East and Gulf Coast container ports. This is truly a ‘container cliff’ in the making.”

Malkin decries the union’s demands:

Don’t believe the union sob stories. ILA members are among the highest paid union workers in the country. Starting pay for dock workers is $20 an hour, with a top straight-time pay rate of $32 an hour. Longevity and overtime bonuses are generous, with ILA members earning an average of more than $124,000 a year in wages and benefits.

And this is a result of agreements that go back decades, and has evolved into a system of patronage (which is the real issue here):

On the New York-New Jersey waterfront, union racketeers have turned archaic work rules into a corrupt system of patronage tied to organized crime. Reporter Carl Horowitz of the National Legal and Policy Center broke down the container royalty dispute this fall: “In 2011 these royalties amounted to $232 million or about $15,500 per worker at Atlantic and Gulf Coast ports. This arrangement was established in 1960 when New York Longshoremen sought to protect themselves against job losses resulting from the introduction of automated cargo container weighing…”

In other words, it’s a ridiculously outdated surcharge on business to cushion the blow of modernity to workers. Unions, of course, siphon off a large chunk of the royalties — more than $20 million last year alone, according to the Supply Chain Digest.

It’s a sweet deal for the union’s members and its stewards:

The union protects no-show and no-work jobs, 24-hour paid work for 8-hour-a-day-or-less clerks, and unlimited paid vacation for shop stewards. ILA has demanded that multiple crane operators be paid for the work of a single operator. And the commission’s hearings exposed ILA bosses tied to mobsters and family members being paid more than $400,000 a year for up to 27 hours a day.

It’ll be interesting to see if or how Obama might react as December 30th draws closer.

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