Dividend Stocks

The Dockworkers Strike May Be Over – but AI Is Still Coming for Their Jobs

Remember the pictures of all the containerships idling off the coasts in the wake of COVID? We nearly had a repeat performance…

Source: The New York Times

Due to a breakdown in contract negotiations, dockworkers on the East Coast and Gulf of Mexico walked off the job last Tuesday morning. It was the first big dockworker strike in nearly 50 years.

It was a huge deal, as the International Longshoremen Association (ILA) represents 45,000 dockworkers.

The longshoremen were not only seeking better pay but also job security. As I discussed last week, the dockworkers were worried about artificial intelligence-powered automation eliminating their jobs. So, the union rejected an offer that included a nearly 50% increase in wages because it retained some language about automation and semi-automation.

Essentially, the strike stopped all containers from being shipped to and from some 36 U.S. ports, including Baltimore and New York/New Jersey. These ports on the East and Gulf coasts handle about 50% of goods shipped to and from the United States.

A two-week strike would have disrupted holiday sales and impacted supply chains for medications and other essential products. Perishable items (like bananas or mangos) would have been the first casualties. But auto manufacturers were also already warning about part shortages.

Thankfully, the longshoremen were back at work on Friday, and their current contract has been extended to mid-January. After that, they’ll receive a 61.5% pay increase over the next six years, though they still have to hammer out the contract to make sure they’re protected from automation.

Newsletter