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[15 comments]

Retailers Ask President to End West Coast Port Strike

December 4, 2012

A strike by 800 clerks represented by the International Longshore and Warehouse Union (ILWU) and supported by 10,000 dockworkers has shut down the Ports of Long Beach and Los Angeles at a critical time for the nation's retailers.

In response, the National Retail Federation (NRF) and Retail Industry Leaders Association (RILA) have called on President Obama to step in and put an end to the work stoppage.

"The shutdown is already having a significant negative economic impact on retailers trying to bring in merchandise for their final push for holiday sales and will soon have an impact on consumers," said Matthew Shay, president and CEO of NRF, in a statement. "The work stoppage not only impacts retailers, but is also affecting their product vendors — many of which are small businesses — and other industries like manufacturers and agricultural exporters that rely on the ports."

"Given the enormous risk posed by a prolonged shutdown of the nation's busiest ports, we urge you to consider all options, including invoking the Taft-Hartley Act, in order to restore the critical flow of commerce," said Sandy Kennedy, president of RILA, in a letter to President Obama. "We respectfully ask that you put the weight of the White House behind resolving this dispute."

Up to this point, the Obama Administration has urged the various sides of the dispute to work together to reach an agreement.

Clerks, who make an average of $80,000 a year not counting overtime, are seeking a 2.5 percent increase in pay. Members of the union, who say they have not had a raise in four years, have been without a contract since July 2010.

Both the ILWU and unions that support the strike argue that federal intervention would allow employers to avoid negotiating in good faith. In addition to wage increases, the union is seeking to address outsourcing within the industry.

Some have suggested the strike at the two ports is costing the U.S. economy $1 billion a day. That figure is misleading, according to Jock O'Connell, an international trade economist, thought to be the source of the figure.

Mr. O'Connell who said $1 billion worth of cargo comes through the ports on a daily basis, told Southern California Public Radio, "Clearly the billion dollars or so of cargo that would have moved through the port had it been open is not going be dumped into the harbor."

Discussion Questions:

Should the federal government step in now and force workers at the Ports of Long Beach and Los Angeles to go back to work? Do you support or oppose the union's option of striking if it is unable to reach an agreement with management after the holiday season is over?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Should the federal government step in and force workers at the Ports of Long Beach and Los Angeles to go back to work?

Comments:

Here are a couple telling paragraphs from the links provided at the bottom of this story:

The employers have repeatedly said the union members are the highest-paid clerical workers in the U.S., having a total compensation package of $165,000 a year, including wages, benefits, pension contributions and paid vacation. That package would be worth $195,000 a year under management's new offer, the employers have said.

On Saturday, the union offered a rebuttal, saying that the employers' claims were misleading. Wages reached $40 to $41 an hour, for an annual pay level of $80,000 to $82,200 a year, not counting overtime, retirement or benefits. The union has asked for a 2.5% raise, said union spokesman Craig Merrilees.

So, we have paper pushers agreeing that they already make at least $80K not counting overtime (or take the management view, and it's more like $195,000)! Gimme a break! One more reason I despise unions. Go Taft Hartley. When Reagan fired all the air traffic controllers, the 4th of July still came and the world didn't end.

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Warren Thayer, Editor & Managing Partner, Frozen & Refrigerated Buyer

Maybe the union can get together with the Hostess workers to discuss strategy. Unions can disrupt a whole lot of things with the strong arm tactics they use, and their power can put a hurting on retailers when they are needed the most. The solutions are to cave in or send them packing, as compromise is not working these days. Getting the Feds involved is a win for the unions, as Obama is their guy, so good luck in this situation for all parties.

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Tony Orlando, Owner, Tony O's Supermarket & Catering

Our economy is in a fragile state right now. I know unions chose their timing when it will be most impactful, but at our country's current state, I think this is wrong and the government should step in. Assuming Warren's research is correct, even using the smaller numbers reported by the union, $82k per year plus overtime, retirement and benefits is a lot of money. I know plenty of seasoned, college graduates who would like a package like this.

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Janet Dorenkott, VP & Co-owner, Relational Solutions, Inc.

There are few areas where unions have enough strength to cause some pain when they go on strike. Ports are one area. This union has been working without a contract for more than 2 years and has not had a raise in 4 years. If the government is going to step in, pressure should be brought on both sides to sit down and hammer out an agreement.

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Max Goldberg, President, Max Goldberg & Associates

In theory, who doesn't want to everybody working rather than striking or threatening to strike? But in actuality we too frequently wind up in power plays whose main objective is to neuter their opponent.

What that there were two or three conceivable options to bringing in merchandise into the West Coast other than at Long Beach and Los Angeles via an imaginary river channel into Wyoming or Nebraska. Would more options in this situation benefit America for the better, or make it worse?

And so we observe the West Coast situation and wonder whose ox is really being gored. Perhaps it is not the unions' ox or management's but America's. Under that scenario, use the Taft-Hartley Law.

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Gene Hoffman, President/CEO, Corporate Strategies International

The business community needs to make up its mind.

Does it favor laissez faire economics—which means that the market should never be interfered with and will eventually settle in the "right" direction on its own—or does it like the idea of big government arbitrarily handing down unilateral decisions from on high?

In a truly free market, the players get to determine the cost of business. In a highly regulated market the government has the right to step in wherever it wants to.

So ... the bottom line here is simple. The union has struck while their iron is hot and management needs to respond by (a) negotiating; (b) settling; (c) holding out and taking the economic hit; or (d) running to the same government it is always chiding for "over-reaching" for help.

The union has a perfectly legal option to strike. Until something about that changes, seems to me that management is facing a series of bargains with various devils. Hey .... nobody ever said capitalism was easy!

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Ryan Mathews, Founder, ceo, Black Monk Consulting

I don't support the strike and I don't think the Feds should get involved. I think Congress should pass a National Right-to-Work Act so some of the thousands who are currently out of work could fill these vacant 800 jobs. I would further advertise nationally that Christmas 2012 is being cancelled courtesy of the International Longshore and Warehouse Union.

Ed Dennis, Sales, Dennis Enterprises

This is another example of how Unions have exceeded their usefulness and have become a detriment to the US Economy.

Unions, in the early days of American industrialization, did in fact serve to properly assert the rights of workers to safe working conditions and a living wage.

Over time the need for such representation has been supplanted through legislative action to ensure safe work environments and fair wages. Unions today have directly contributed (though not solely causal) to the decline of American Manufacturing and to uncompetitiveness of American Made Products. Union workers enjoy compensation packages and pensions that dwarf many white collar workers and individual business owners' compensation.

I say invoke the Taft-Hartley act and get out of the way of States who pass "Right-to-Work" laws to protect against Union Activism.

Charles P. Walsh, President, OmniQuest Resources, Inc

Kudos to Ryan for calling it like it is.

We of the laissez faire state of mind can't have it both ways. If we want government to stay out, we can't invite them in when the other side has us on the ropes in the 10th round.

There is one problem with Ryan's analysis—when government steps in isn't left up to the business community anymore. Government is picking and choosing its battles at will.

But, back to Ryan's point, that is because both sides cry for them to intervene when it is in their interest—and you cannot close a cracked door. It swings open whenever the wind blows hard enough. Would that we had never unlocked it to begin with.

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Ben Ball, Senior Vice President, Dechert-Hampe

I doubt if the merchandise in those containers are life and death items that are needed for your health.

It seems the retailers are doing just fine with the merchandise that they have for sale now.

If their are other ships in route, re-route them to the South or the East if that will get them unloaded and satisfy the merchants. It is all part of doing business.

Let them strike; at some point in time there will be an agreement.

'COLDSPOT'

Give them the 2.5% raise! This is exactly why there are unions in the first place. Demonizing them, then holding out on pay raises for 2+ years only justifies their existence.

As the saying goes, C'mon Man!!!

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Lee Peterson, EVP Creative Services, WD Partners

I knew something was wrong when the demands sounded downright reasonable, even modest. Anyway, the questions are pretty much boilerplate "do you like the idea of unions because they're free markets at work, or do you think they're a cancer that should be excised?" Neither and both, I guess; I wonder how Santa handles HIS labor relations...I've never heard of elves striking (except maybe Hermie). Merry Xmas, everyone.

'notcom'

The NRF is right to voice an opinion, and urge sanity on all parties positions. But, they should also understand that they are pushing string up a hill.

The shakedown is in place. These union employees understand that at $80,000+ per pop, they are not going to get a great deal of public sympathy. So, take short term strikes by a smaller group of associates (that way strike funds for the 10,000+ ILWU brethren doesn't take a beating), and disrupt, with really no intent of settling.

Should the Federal Government step in and either open the port, or force a negotiation? Yes.

Then again, the White House, Senate, and House should agree to sit down and hammer out the compromise on the Fiscal Cliff issue. Do you think that those lads and lasses have any intention of doing that immediately without sacrificing political capital? If you do, I have a bridge to sell you.

Long term, ports, like money and people, are fungible. People and business go where they are welcome, and stay where they are appreciated. Los Angeles and Long Beach have hit their pinnacle in terms of TEUs. Turn the ports back to the State of California, and let them address their issues. The Golden State is merely heading toward ever greater debt and destruction. And, in the process, loss of population, businesses, jobs, and prosperity.

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Roger Saunders, Managing Director, Prosper Business Development

Both sides in the dispute agreed this afternoon to federal mediation.

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George Anderson, Editor-in-Chief/Associate Publisher, RetailWire LLC

The knock-on impact of this strike impacts thousands of low wage earners in retail and the tens of thousands of workers in media, manufacturing and transportation industries dependent upon a healthy retail sector. I understand the choice of timing, but it is an insensitive act by the union—particularly when the workers involved are already at a wage level allowing them a life better than the majority of Americans. The federal government must intervene.

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Mike Osorio, Senior VP Organizational Change Management, DFS Group

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