It may not be what you think.
Just days before year's end, a growing chorus of retailers, manufacturers, and conservative politicians called on President Obama to invoke a notorious anti-union provision of the Taft-Hartley Act of 1947 and declare a "cooling off" period to prevent the Atlantic and Gulf Coast longshore workers from striking. Meanwhile, heated negotiations between the International Longshoremen's Association (ILA) and United States Maritime Association (USMX) pivoted on a little-known and less-understood "container royalty fund." While, according to a brief statement made Friday by the Federal Mediation and Conciliation Service, a 30-day contract extension has averted a strike, at least temporarily, lets hope the ILA successfully negotiates to retain this important contract provision.
If the ILA does strike next month, the US economy will suffer a major hit as the last time longshore workers stopped work, during a 10-day 2002 West Coast lockout, $1 billion per day was lost. Now, 15,000 workers desperately -- and justifiably -- are trying to preserve some of the best blue-collar jobs left in a nation that has outsourced millions of manual labor jobs and cut millions more due to "progress" wrought by new technologies. The current struggle is directly connected to a prior threat to the livelihoods of longshoremen that resulted in the creation of the container royalty fund more than forty years ago.
In the late 1950s, when containers first arose, longshoremen suffered tremendously even as the overall economy benefited from this technological innovation. Soon, longshore workers moved ever-more standardized 20- and 40-foot metal boxes that seamlessly transferred from ships to 18-wheeled trucks to railroads. "Containerization," dependent on skilled longshore workers, made modern globalization possible by drastically reducing the costs associated with marine transport.
Alas, the main casualties of this transformation were these same longshore workers -- whose numbers plummeted by more than 50% in a single decade and even more over a generation. Similarly, their dockside working class communities disappeared as those who worked on the waterfront found that the waterfront literally had moved, a result of the massive increase in acreage demanded to handle containers.
Fortunately, the story is not all tragic as the two powerful unions that represent(ed) longshore workers -- the ILA on the Atlantic and Gulf Coasts, the International Longshore & Warehouse Union (ILWU) on the Pacific -- ably negotiated with employer associations to gain a "share of the machine," in the words of the ILWU's legendary leader, Harry Bridges. Bridges convinced his members to sign the Modernization & Mechanization Agreement (M&M) in 1960 that, basically, negotiated away West Coast longshoremen's ability to resist the introduction of containers. In exchange, Bridges won generous early retirement packages for older workers but, perhaps, did not get as good a deal as he might have if the ILWU had struck in advance of the onslaught of containers.
By contrast, the ILA took a very different approach in the 1960s, as containerization decimated the Port of New York and birthed Port Elizabeth and Port Newark in nearby New Jersey. ILA members fiercely resisted employer demands to reduce gang numbers as rank-and-filers pulled repeated strikes, including "wildcats," to demonstrate their anger over the very real threat to their livelihoods. While easy to castigate the ILA for its history of corruption and racial exclusion, the leadership effectively negotiated to add the "container royalty fund" to its contract. Subsequently, shipping profits skyrocketed but ILA membership plunged. The money in this fund went to longshoremen but only after a major fight and as part of a deal worked out that, first and foremost, drastically expanded corporate profits as labor costs shrunk.
Today, labor makes up less than 4% of shipping costs so, truly, global shipping corporations are pushing awful hard to reduce their costs by a fraction of 1%. Sure, longshore workers make good livings. The better question is: why shouldn't the rest of us? Moreover, they are skilled workers in a dangerous industry in which jobs still are not guaranteed past the next ship. The work that they do is central to the global economy. And, honestly, they fought to protect themselves from the potential devastation of a new technology.
In short, the ILA did a savvy job of negotiating the container royalty fund and deserve to hold onto it, especially as ever-more middle-class Americans get squeezed. Not only do shipping corporations make sufficient profits, current USMX demands totally ignore that longshore jobs plummeted due to the introduction of containers. Employers' effort to cap and, in the future, eliminate the fund represents a cynical example of using the current economic and political climate to reduce workers' earnings. The ILA should be supported in its struggle to hold onto what it negotiated for and its members still need. Hopefully, the final contract will preserve the fund; if employers resist, the ILA very possibly will go on strike.
Peter Cole is a Professor of History at Western Illinois University in Macomb. Author of Wobblies on the Waterfront: Interracial Unionism in Progressive-Era Philadelphia, Cole currently is working on a book that compares the modern histories of longshore work, technological change, race relations, and unionism in the ports of Durban, South Africa and the San Francisco Bay area.