UPDATED: Why is there a strike at the Port of LA?

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Port of LA. Photo by Green Fire Productions/Flickr

Monday UPDATE: On tonight’s “Which Way L.A.?” guest host Alex Chadwick asks union spokesperson Craig Merrilees why the workers are striking, shutting down most of the ports of Los Angeles and Long Beach.

The union accuses employers of outsourcing these good local jobs overseas to Costa Rica, Taiwan, and elsewhere. But Steve Getzug, a spokesperson for the Harbor Employers Association, says there’s no outsourcing. He told Alex Chadwick that due to a reduction in volume caused by the down economy, the employers simply have not been replacing departing workers they don’t need.

And that $1 billion a day figure we keep hearing about? Jock O’Connell, an international trade economist affiliated with Beacon Economics, said that figure represents the value of all the goods passing through the ports. But most of those goods will still make it to market – the shippers aren’t dumping them into the Pacific – so it’s not an accurate reflection of the economic impact of the work stoppage. The real economic impact won’t be known for some time, but could be significant, and will grow geometrically the longer the stoppage continues.

In addition, the ports of L.A. and Long Beach are facing growing competition from ports in Canada, Mexico, and, in 2015, from the expanded Panama Canal. O’Connell said this work stoppage could cause shippers to decide to diversify and ship less goods through L.A. and Long Beach, which currently handle 40 percent of all containerized goods coming into the country. You can hear the whole show here:

In a letter Sunday, Los Angeles Mayor Antonio Villaraigosa urged a resolution to the port strike which has now continued into its seventh day. The L.A. Times reports that the mayor wrote, “The cost is too great to continue down this failed path… Mediation is essential and every available hour must be used.” Many are considering the long term effects of a work stoppage. The Mercury News reports:

Several sources have calculated that the strike is costing the economy more than $1 billion a day, but Jock O’Connell, an international trade economist who studies the shipping industry, said Sunday in an email that the figure is slightly misleading. O’Connell said it will be several weeks before anyone will be able to come up with a good estimate on the true economic cost of the strike. (More here)

Friday UPDATE: As of Friday morning, a small number of strikers are continuing to picket at the ports as negotiation talks resume.

It could just be modernization causing fewer jobs for clerical workers at the Port of Los Angeles, where strikes are in their third day. About 800 people walked off the job, not to protest cuts in pay (in fact, these workers earn about $40 an hour), but to protest dwindling job opportunities and to demand a guarantee that there be a secure number of positions.

The ILWU Local 63’s Office Clerical Unit, which is backing the workers, contends that vacant positions aren’t being filled, blaming outsourcing. New technology makes these jobs easy to send elsewhere, Craig Merrilees, an ILWU spokesman in San Francisco told the AP.

Thanks to computer technology, shippers can easily “push buttons and maybe even get tax breaks” by moving work to other regions, Merrilees said.

But the employers involved in negotiations deny any outsourcing, saying there was no “business need” to fill the positions.

The strike comes at a relatively slow time for shipping as most holiday items are already at stores, but it has shut down traffic at the ports of LA and Long Beach in large part because the dock workers, with their strong union ties, won’t cross the picket lines. Traffic has already been diverted to ports in Oakland and Mexico, reports the L.A. Times. 

So how will the strike end? The Daily Breeze reports on three possible scenarios:

In the first, the sides will come to an agreement on a new set of contracts. In the second, the Office Clerical Unit will quietly drop its picket lines and return to work as it continues to bargain for a new contract, effectively going back to the situation before the strike. In the third, President Barack Obama could seek an emergency injunction under the 1947 Taft-Hartley Act, which could require the workers to return to the port during an 80-day cooling off period.

We’ll have updates and more analysis on tonight’s “Which Way, LA?”