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Notes -
Automation is coming for our jobs, old economy edition:
On Tuesday, the 45,000 or so longshoremen who work at the East Coast ports of the United States will go on strike. Or, at least, there's an 89% of this happening according to Polymarket.
This is a bit of an interesting development for a few reasons.
Though blue collar, these longshoreman are extremely well paid. With overtime, 1/3rd of the union members earn over $200k per year.
The demands of the union are also pretty strident. They are seeking an increase of 80% over 6 years.
Furthermore, the union is demanding that no further automation happens at the port. Obviously, the ports hate this since. They are incredibly inefficient compared to European and Chinese ports.
These ports handle 60% of the goods coming into the United States. Even a 2 week shutdown will snarl supply chains into 2025. Shipping prices, already elevated due to the Red Sea shutdown, will soar to levels never seen. Anything too bulky to fly in will see shortages.
This is all before an election season. The Biden administration could in theory wield the Taft-Hartley Act to break the strike, much like Reagan did with the air traffic controllers. But breaking a union, even a very well-paid one, is not a great look right before the election.
It will be interesting to see how it all plays out. As of right now, the union and the ports couldn't be further apart.
My guess is the ports get bent over after a week or so and the costs get passed on to the consumer. The Biden admin will probably force both sides to come to the table. I've heard "we can do this the easy way, or we can do this the hard way" has worked recently. They might ask the union to push this until after the election. The union would be foolish to accept that right now since their leverage will never be higher.
Modest proposal: Automate the ports, but keep paying the longshore-men until they reach retirement age, and then just don't hire any more to replace them.
We'll get the efficiency benefits right away, the financial benefits over the next 47 years, but no-one will find themselves suddenly struggling to put food on their families.
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Where are you getting this from? Per an NPR article, the current top rate is $39/hour. With time and a half and regular double time on Sundays and Holidays you'd have to average 70–80 hours per week to hit 200k. While I'm sure there are some guys who can keep up with such a schedule for a full year, even the most hardened blue-collar guys I know can't work that much. And the way they talk about the guys who do, they're the ones who end up dying of heart attacks three weeks after retiring.
Biden has already said that he won't invoke Taft-Hartley, and that he's encouraging the sides to reach a resolution. This is the correct move from a political perspective; he can't force a contract upon management, so Taft-Hartley is the only card he has to play other than (possibly) mediator. Republicans have been trying to court unions in recent years (and have been pretty successful among the rank and file), but most of them still harbor many of the sentiments expressed downthread. Hell, even Trump complimented Elon Musk on his supposed union-busting tactics. If there is a strike it will take a hell of a lot of restraint for Trump, or any other Republican, to blame Biden for not sending them back to work. Putting this fornt and center within a month of the election isn't a good look.
Of course, I don't think Trump is stupid enough to make that kind of error. More than likely he does his usual schtick where he invokes his self-ordained status of Master Negotiator and says that if he were president then this strike wouldn't have happened because he would have been able to mediate an agreement. At which point Kamala Harris informs him that if he's so great at it then he could end the strike immediately be leaving the campaign trail to mediate a deal. There is, of course, zero chance that Trump actually does this, and if he tries, there's little chance that he'd be able to do anything (if the parties involved even let him get near the dispute), at which point he has to move on to do something else. But my guess is that no one will make a big deal about this.
This is a mob connected union, widespread time card fraud is extremely plausible.
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I used Perplexity, although some of their source data may behind paywalls. The numbers jive with other sources I have seen on Twitter, which have asserted median wages above 150k, with foremen making up to half a mil.
https://www.perplexity.ai/search/how-much-do-ila-east-coast-lon-VkXsWI_qRN..SODTx.9QUg
As Biden himself knows, "encouraging" can take many forms. His admin honestly doesn't give a care for the Constitution, so they might just executive order a resolution, and then let the legal system throw it out in 24 months. The election is in 5 weeks.
But I'll confess I don't know what will happen. My heuristics are this:
The sides seems really far apart
But, it's a political football. The uniparty will do what it takes to resolve this in a way favorable to Kamala's election chances.
#1 and #2 seem at odds with each other. So the most elegant solution is delay tactics, therefore I think delay is the most likely. Possibly there will be a symbolic strike for a day or two. Low confidence all around.
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I just want to point out for those who don't know- longshoremen are not skilled labor. They are extremely well paid in hereditary sinecures that may or may not be bolstered by fraudulent timecards and maintain their dominance with an old-fashioned organized-crime-linked union.
I mean, good for them. We should all be so fortunate. When software engineers are begging for scraps on the streets, the longshoremen will truly be kings among men. When the social contract (referring to pro-social business norms) cannot keep your family fed, people will resort to other means.
I think that this the opposite of good. It is pure rent-seeking. If everyone does that, you end up with the medieval guild system. Want to bake and sell bread? Sorry bro, you must be in the baker's guild to do that. No, you can't just join the guild. The best you can do is to beg for an apprenticeship with a guild member, and after a decade of working for pitiful wages and playing politics, you might earn your cushy guild job. Or the son of a baker might get that job instead. In such a system, nobody has any incentive to work on innovation or efficiency.
Today, you would end up with a system where you can't fill your gas tank by yourself, because the gas station attendant union lobbied against it, nor change your own car tires, because once the car replaced the horse, the blacksmith's union transitioned from changing hoof irons to changing tires.
There are never enough cushy union jobs for everyone. The net effect is a transfer of wealth from the the people who are not in union jobs to union members through increased product costs.
I am not as rabidly anti-union as the Mindkiller podcast people, and think that historically, unions were probably net-good at times. From a gut feeling, collective bargaining feels more acceptable if exploited factory workers do it than if a cartel does it. But messing with the forces of a functioning market is rarely beneficial.
See: Oregon, New Jersey
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That drives up the price of all goods. They are really sticking it to you and me. And also making our ports far behind the automated ports the rest of the world has.
Well yeah, but if I were a longshoreman, I would rather my Amazon order be $5 more than have no job. Minimizing costs for businesses is not an end on an of itself. From the perspective of the longshoreman, trying to automate away their jobs is defecting and its obvious they would want to punish this behavior.
I have heard at least one (blue-voting!) New Yorker complain about the stranglehold the transit unions have on the city's mass transit. In particular that the leverage of a strike halting the subway prevents investment in some better technology that would improve the rider experience. In particular, this included any sort of automatic driving system, which (I'm told) limits total system throughput and those self-aligning train and platform doors that have existed elsewhere in the world for decades and would probably improve safety substantially.
I'm not wholly opposed to unions, but I don't think they uniformly make everyone's life better either. See also the Chicago plumbers union and lead pipes. But I suppose most of the time they probably ask for more reasonable concessions.
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Automating the ports is pro social. It's just not pro-longshoremen, who account for 0.01% of society. What kind of costs should the rest of us pay so that they can keep doing this generation after generation? I'd be happy with some kind of lump some payment plus forced retirement so this danegeld situation stops. Otherwise it's just another of the absurd frictions that are eating away at American prosperity.
And thus we import cheap Chinese goods instead of supporting American manufacturing, and outsource millions of cubicle jobs to India and the Philippines.
I have no strong feelings on longshoremen or automation in general, but optimizing for the lowest cost of goods and services for the greatest number of people is only maximally beneficial in an actual global economy where everyone from India to the US is fungible. In the world we are in now, it's not just a choice between "Should longshoreman be overpaid or should Americans pay more for a toaster?" Eliminating American jobs eats away at American prosperity also.
It should be the federal government collecting tariffs on those imports, not the union.
It also increases the expense of exports.
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American unemployment is at something like 4% which is pretty good historically speaking (yes there are other measures of unemployment, no they don't show a crisis of unemployment). This despite jobs constantly getting offshored, automated, and otherwise eliminated over the past two hundred years. Where are the farmers who used to make up 80% of the population in the 18th century? Where are the spinsters and weavers who used to make up almost the entire female population? Are their kids going hungry in the streets? Obviously not, and neither will the kids of the longshoremen. Are we better off with abundant food and textiles? Obviously yes (I don't consider obesity to be a compelling counterargument to material prosperity).
Looking at it the other way - why should we prioritize buying American? Wouldn't it be better if Californians bought Californian instead? Of course my interests are more aligned with Americans than indians. But they are even more aligned with Californians on account of being surrounded by them. And in fact, why shouldn't I restrict all my economic activity to my blood relations? Those are the people closest to me of all.
Only due to the way we collect these statistics, which is suspect at best in order to make the party in power look good. Working Amazon or gig economy is often considered "employed", but it's not really living, either. Might as well be a slave.
https://www.pewresearch.org/internet/2021/12/08/the-state-of-gig-work-in-2021/
I don't consider this to hugely move the needle.
There's always been jobs that people look down on but still need doing.
I wish you would at least have read the parenthetical intended to head off criticisms of this type and engaged more substantively rather than gesturing at two things you don't like.
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I won't generalize as to whether the ports should be automated (I think they should!), but yes, you should strive to do more commerce with people closer to you, and less with those further away.
Trust is a superweapon in business. Industries where trust is paramount (for example, the diamond industry) are dominated by tight-knit ethnic groups.
Any businessman will tell you that a contract is just a piece of paper. Ultimately if someone wants to screw you, they will, damn the contract. Trust is based on a theory of mind of the opposite party. Think about a prisoner's dilemma situation. If the other party is your brother, would you co-operate? What about your friend? A guy who looks like you and thinks like you? A random American? A Haitian immigrant?
The answer, of course, is cooperate, cooperate, cooperate, maybe, defect. And don't worry the Haitian immigrant will defect too for the same reason. I trust people who are like me. The more like me they are the more I trust them.
See the Arab world for how this pans out when you take it to the logical conclusion. As an American you have the luxury of professing this belief because the entire world around you is made possible by trusting strangers and you, too, benefit from this enormously. You're not actually going to go live innawoods with your cousins and live off the fatta the land.
That trust is a superweapon is exactly why those who can effectively cooperate with more people are more prosperous than those who are stuck with kinship networks. De Beers revenue is $6B. Walmart revenue is $650B.
Just by the by, can you explain why you typed this in this way?
I've seen it on the Internet before, and it looks like it must be a reference to something, but I can't think of what.
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Gravity theory of trade actually explains our trading flows a bit more than strict comparative advantage. That is, you do trade with Californians more than ever one else, and then Americans more than everyone else, and so on and so forth.
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Because it's Friday night... I think you should trust your closest relatives, not actually breed with them.
But yeah, in all seriousness, I think that living in a high trust society is fucking awesome and I lament its loss. I tend to err on the side of more trust, rather than less. But trusting strangers the same amount as relatives is pathological pro-outgroup bias.
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Fire them all. The hereditary sinecures longshoremen enjoy are intolerable. It's unskilled labor. There's an army of people who'll sign up to do it for half the pay.
Whoever does that would need to spend the rest of their life in something like a witness protection program, and probably their family too, maybe even out to cousins and so on. The incentives are not aligned to solve the problem.
I don't believe in surrendering civilizational order to thugs. If longshoremen come around and start to break kneecaps, shoot them until they are dead. It's worked in the past and will again. Violence is a deterrence to violence.
The government is on their side and has been since the foundation of the NLRB.
As we discussed below, the 5th Circuit is working on that problem.
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I'm talk about what a well-run state would do, not predicting what ours will do. I agree with the prediction of Luddite victory. I'm just saying it doesn't necessarily have to be so.
Well, you seemed to be proposing a solution, and my point is that it wasn't a valid one.
Every mafia is breakable. The Sicilians are much less powerful than a generation ago because both the US and Italy did what was necessary to destroy them. It didn’t make a difference when it came to drug distribution because the ndrangheta took over, but certainly the influence of the Italian mob in the northeast in many parts of construction, shipping, catering, waste and other businesses has significantly weakened in the last 30 years.
Mob violence is much harder to effect in the US than it was in the 70s for legal, technical and demographic reasons (Irish and Italian extended families are much smaller, more atomized and more widely geographically distributed, with less influence in law enforcement). They might succeed in threatening or even killing an official or two, but everyone involved will be off to prison for decades pretty soon thereafter and that will be that.
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"Valid" in what sense? One that the correct government can take given its social constraints? Sure. But there's a whole universe of solutions inaccessible to our hamstrung political machine and a whole class of "coup complete" problems that cannot be solved within these constraints. It's fair to talk about them.
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Reuters article
AP article
The interesting book The Box describes how the same union (the International Longshoremen's Association) fought containerization seventy years ago.
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