West Coast Dockworkers Dispute Could Paralyze U.S. Economy

Imploding U.S. mortgage markets leave behind trillions of dollars in economic damage. The dollar's slide against the euro and the yuan raises fears of a currency collapse. January job losses portend recession.

To these threats to U.S. economic stability, add a new and severe one that is brewing in the conference rooms of the Cathedral Hill Hotel, a blue-collar establishment on Van Ness. There, West Coast dockworkers' representatives are devising a strategy to renegotiate a unified ports agreement with shipping companies that is scheduled to expire July 1. If the renegotiation is as fractious as it was in 2002 — when shippers attempted to break the union by shutting down 29 West Coast ports for 10 days — an extended dispute could paralyze U.S. economic activity and send financial markets tumbling.

A shutdown like the last one "carries the very real risk of triggering a sudden crisis in international financial markets," U.C. Berkeley professor Stephen Cohen, co-director of the Berkeley Roundtable on the International Economy, wrote in a 2002 paper. When I spoke with him last week, he said he'd be watching the situation this time, too: "I don't think the significance is any different. At some point, you start running out of parts, and the factory stops, and the factory that relies on that factory for components stops, and you have a chain reaction that's really rather a nightmare."

I'm the last person to wish further disaster on America — the newspaper industry, after all, is one of the first casualties in an economic decline. But I still say good on the International Longshore and Warehouse Union (ILWU), the dockworkers' syndicate started 70 years ago in San Francisco by Harry Bridges. Though the union, now representing 25,000 workers, has shrunk since jobs disappeared with mid-century innovations in the shipping industry, it still ranks among America's blue-collar royalty thanks to contracts that give full-time workers typical annual wages in the six figures.

While the upcoming labor negotiations might terrify some economists, they could also inspire victims of America's mirage economy, where decades of apparent stability and growth have been accompanied by greater poverty and uncertainty among those on the bottom rungs. During the coming hard times, America will need a labor movement that can put a scare into Wall Street — even if every once in a while the workers contribute to the risk of economic uncertainty for the rest of us.

Cohen's view isn't shared by everyone. Ken Jacobs, chair of the UC Berkeley Labor Center, says the effects of the short-term shutdown in 2002 were "grossly overstated."

"If you have a lockout that stretches over a long period, you would start seeing an impact," he said. "But the short term is much, much smaller."

The impact, however, of a labor movement emboldened by the ILWU's influence over the first link in the stateside industrial supply chain might be significant: It could provide hope for workers during the coming recession.

The mood was jovial last week at the ILWU Local 10 hiring hall near Fisherman's Wharf, where members had gathered to hear Ken Riley, president of the union local in Charleston, South Carolina. In 2002, members of the S.F. Local 10 had helped Charleston dockworkers rebuff an effort by a Danish shipper to use nonunion workers.

Clerks, crane operators, and other port workers told me they had gathered to give each other support for what they expected to be a nervous period before the spring's West Coast contract negotiations pitting the ILWU against the Pacific Maritime Association, which represents shippers.

Author Suzan Erem, whose book about the 2002 labor dispute, On the Global Waterfront: The Fight to Free the Charleston 5, has just been published, attended the meeting with other union notables to declare that international collaboration among unions could help exploit globalized trade to workers' benefit by using union clout at ports around the world.

In 2000, The New York Times ran a story about how Charleston police violently quelled a union demonstration. Lawrence Thibeaux, then-president of S.F. Local 10, was appalled, and called Riley to offer help. "It was basically what you'd call a cold call," Thibeaux said.

West Coast union members eventually raised $100,000 to help pay for the legal defense of five workers arrested during clashes between picketers and police. Meanwhile, Local 10 executive board member Jack Hayman contacted his friend Julian Garcia, leader of the Spanish dockworkers' union La Coordinadora. The two had known each other since the mid-1990s, when dockworkers worldwide supported a strike in Liverpool, England.

Garcia was glad to lend a hand. His union drafted a letter to officials of Nordana Line, the company seeking to use nonunion labor in Charleston. Hayman recalled the letter as saying, "It's not loaded professionally, and unless it's loaded properly, we won't unload this ship in Spain."

Nordana officials, apparently concerned that their company might become the target of sympathy strikes at ports around the world, decided to negotiate with the Charleston dockworkers. Before long, the union had a contract.