Labor's muscle on Pacific docks

Work stoppage in the West could cost $1 billion a day.

Few unions can cause this kind of a ruckus anymore.

Forty years ago, it was the steelworkers, roiling President Kennedy and national inflation when they called for a rise in steel prices. At the turn of the century, it was a coal miners' strike, testing President Theodore Roosevelt's mettle and threatening Americans' ability to heat their homes.

Now, it is a lockout at West Coast ports that would seem to hold the holiday season hostage, with millions of Christmas toys and televisions from Asia trapped on a conga line of ships left bobbing in untended harbors.

By one estimate, the shutdown, which began Sunday afternoon and centers on faltering labor negotiations, is costing the US $1 billion a day. It is, in many ways, a throwback to a different era – to a time before unions were so picked at that they lost their ability to shake the nation.

For the moment, many companies are coping. Anticipating the problems months ago, they took steps to get their Christmas merchandise from Asia earlier. But prolonged labor strife, experts say, could imperil any national economic recovery, and – as in the past – sweep a reluctant president into the froth of bare-knuckle union politics.

"The key questions are how long will it last and whether the government will intervene," says Bruce Steinberg, chief economist for Merrill Lynch & Co. "I don't think the government will let the economy be held hostage by some longshoremen."

It would not be the first time. Indeed, over 70 years, the workers of the International Longshore and Warehouse Union (ILWU) have created what some observers call the most powerful union in the United States.

In 1934, under the hawk-nosed labor activist Harry Bridges, the issue was 10 cents more an hour in wages and the right for the union to send who it wanted to each job – rather than depending on corrupt foremen, who often chose workers based on their bribes. He incapacitated the entire West Coast with a strike from San Diego to Seattle, and won his concessions after San Francisco police killed two protesters and injured 100 others in what longshoremen now call "Bloody Tuesday."

At issue today is technology. As shipping, like other industries, becomes increasingly computerized, the ILWU wants to make sure that the people who run this technology are unionized. The terminal operators and shipping lines that make up the Pacific Maritime Association (PMA) have so far not agreed.

Moreover, the companies say that workers, who have been without a labor contract since July 2, have begun to protest by slowing down, strictly adhering to break times, and not accepting overtime. This amounts to a paid strike, the PMA has said, and it shut down ports Sunday until a new labor agreement is reached.

The immediate impact might not be severe. One of the reasons economists are not concerned is because many importers shipped goods this spring and summer. "Goods from China soared this summer – all those toys, clothes, and electronics came pouring in," says Mark Zandi of the website Economy.com.

He and others claim that the lockout would merely weaken the economy a little further this economic period – but not impede a rebound in the next. Yet others are not so dismissive. Stockpiling goods, they say, only works for certain industries, like toys and computers, not fruits or perishable goods.

Moreover, stockpiles only last so long, and the dearth of goods – should the lockout continue – would certainly put a strain on retailers.

"It's true that a lot have tried to provide a buffer by bringing in goods early and putting them in warehouses, but that means an added expense and that buffer won't last long," says Erik Autor of the National Retail Federation, who worries that it could take weeks to get the distribution system back operating once the disruption is resolved.

"You can look at the Pacific trade as a big conveyor belt, and when it stops the whole system backs up," he says.

The longer the impasse continues, the more pressure there will be for President Bush to step in. The administration has been tracking negotiations since they began in May, reports say, and it has at various times put pressure on the workers' union. Yet the ILWU isn't likely to be cowed.

Today, the ILWU's unique strength still courses from the unity forged under bridges on "Bloody Tuesday." Outside the San Francisco hiring hall, there are two white outlines of where the workers fell in 1934.

All workers must take classes about the union's history as well as the current labor contract. And in the Bay Area, ports close every year on July 5 to remember those killed in the 1934 strike.

With some 10,500 workers at all the West Coast's 29 major ports, the union has parlayed this solidarity into remarkable success. As the current lockout attests, it can, essentially, shut down one coast of the United States, giving it unparalleled bargaining leverage in a country ever-more reliant on imports – especially from Asia.

Strikes in 1936, 1948, and 1971 have helped win the average ILWU dockworker a salary of nearly $110,000 a year, including medical benefits.

While not a strike, the current situation promises the same results, as the union's sinew is tested amid a broader economy clambering for a return to business as usual. Says Mr. Zandi of Economy.com: "The economy is very weak and struggling under the weight of many problems, and this just adds one more problem."