Possible West Coast dock strike could create economic havoc

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http://www.sfweekly.com/issues/2002-06-05/smith.html/1/index.html
>From sfweekly.com
Originally published by SF Weekly Jun 05, 2002
©2002 New Times, Inc. All rights reserved.

Off the Waterfront

News media have abandoned the labor beat and missed a
story of global financial import: the looming possibility of a
longshoremen's strike at West Coast ports

By Matt Smith

For the modern social anthropologist, there's no better place for
fieldwork than the business convention. A researcher entering the
George R. Brown Convention Center in Houston to investigate the
natural gas industry finds rooms full of stout and comfortable men
who spend workdays flogging fuel. Most played football
at Texas universities, and now wear golf shirts with an enviable,
gregarious ease. Junketing Latin American bankers, meanwhile,
sport expensive clothes and bodyguards. During bull markets they
bring mistresses; in down years, wives. At tech industry conventions,
researchers find hordes of shy obsessives. These
subjects are patient, though, and have a funny way with words.

It was therefore with great anthropological anticipation that I
approached the Investigative Reporters and Editors conference held in
San Francisco last weekend. This is perhaps the most important
convention for journalism, which is a business that isn't supposed to
act like a business, so I wasn't sure what I'd find. Entering
the lobby of the Embarcadero Hyatt Friday I discovered cliques of
retiring people struggling to be sociable. They became excitable when
conversation turned toward government policies regarding various
types of paperwork. In anthropological terms, they seemed similar to
computer conference attendees (or the aluminum wonks one always
finds at metals industry conventions).

I followed the flocks of journalists into a habitat called "the seminar"
in hopes of finding distinctions; sadly, few appeared. Journalists may
have their quirks, but lately they seem more and more like modern
businessmen and -women. They appear to have drifted, anthropologically
speaking, far from the news profession's blue-collar roots. And the more
they become like businessmen, I have discovered, the more they cover
business.

Of more than 100 seminars at the IRE conference -- an assemblage of the
journalism profession's most idealistic members -- there were only two
panels that specifically dealt with working stiffs; one addressed workers
overseas, the other related to the Occupational Safety and Health
Administration's failures in regulating business. But many of the seminars,
in one way or another, were about covering business.

I asked Todd Johnson, an economist with the U.S. Bureau of Labor
Statistics who was manning a booth at the conference, whether he had
been approached by any reporters who specifically covered working Joes
and Janes. "There was one intern with the Wall Street Journal," he said.
"She was wondering that, too, whether there was a labor beat anymore."

It's no secret that few papers cover labor intensively, or from the
point of view of workers, anymore. The San Francisco Chronicle, for
example, fired its labor editor back in 1970.

"Now, anything about workers is presented on the business page, and done
for the benefit of the people who read the business page," says former
Chronicle
labor editor Dick Meister, who syndicates his own column on labor
issues. "It's written for somebody reading it from that point of view:
'Here's what these bastards are doing to us now.'"

Because of the disappearance of the labor beat, daily newspapers and
their public miss big stories -- for example, the mass migration of
workers into, then out of, San Francisco for the Internet boom wasn't
covered as a labor story. As a result, the phenomenon never entered the
public mind, except as a curious caricature full of locals cursing the
damned "dot-commers."

One of the more glaring examples of major labor news being ignored is
currently occurring just 21 blocks from the site of the IRE conference.

While 1,000 or so investigative journalists milled around the Hyatt,
local newspapers seemed oblivious to one of the most important financial
and economic stories of the year -- very possibly because it is, on its
surface, a labor story. At the International Longshore and Warehouse
Union (ILWU) headquarters on Franklin Street, shippers and union
members are amid contract negotiations that, economists say, threaten
to send tremors through the world financial system. The
labor contract under re-negotiation covers 10,500 dockworkers on the
U.S. Pacific seaboard and expires June 30. There are loud rumblings of a
possible strike or lockout.

"A West Coast shutdown has a huge risk. It could well trigger a crisis
in international financial markets as speculators hear the news and just
dump Asian currencies and stocks, and then wait to see whether it will be
a quick strike -- a day or two -- or something more substantial, and severely
hurt those economies," says Stephen Cohen, a UC Berkeley economics
professor who is co-director of a research group known as the Berkeley
Round Table on the International Economy. "When you start with a
financial crisis, all sorts of very unpleasant things follow."

For most of the past 30 years, longshoremen have had good relations with
shippers. Since the longshoremen-led San Francisco general strike of
1934, there has been only one West Coast dock-related work stoppage,
in 1971. The longshoremen's union even cooperated with the introduction of
labor-saving standardized shipping containers in the 1960s and '70s, in
exchange for one of the most lucrative labor contracts in the world.
Unionized
longshore workers now earn between $105,278 and $340,000, depending
on job category and hours worked, with part-timers making around $70,000
per year, according to the Washington Post.

Relations have been more contentious since 1996, when the Pacific
Maritime Association brought in a president who came from the
managed-health-care industry and who was dedicated to cutting costs. In
1999, workers initiated an undeclared strike, slowing work so much that
shipping customers urged management negotiators to rescind demands for
work force-reducing technological change. Workers won large increases in
pensions and wages, and shippers didn't get technological efficiency that
would cut costs, says Robin Lanier, director of the West Coast Waterfront
Coalition, a trade group.

"The slowdowns were very disruptive," Lanier says. "Trade was getting
through, but it was backing up ships and trade. Importers and exporters
who used the ports got upset because of the slowdowns, and exerted
pressure on the terminal operators to reach an agreement as soon as
possible to make it go away."

The maritime association and the longshoremen's union have agreed not
to speak to journalists during the current round of negotiations. But
Lanier is under no such restriction, and he says things will be different in
this negotiating round. Under the current contract, shippers are unable to
use the kind of electronic tracking technology that companies such as
FedEx and UPS have made commonplace. Instead, positions are reserved
to do work that would be made instantly obsolete if simple technological
upgrades were made. (For example, when ships reach port, dockworkers
must now re-enter electronic manifests into computers, because
there is no way to transfer the cargo lists from ship computers to shore
computers. Similarly, rather than using bar codes and other types of
standard warehousing technology, longshoremen now keep track of
containers by driving around the docks in pickup trucks.)

The union, for its part, has told its members that the technology issue
is a ruse masking a subtle effort by the maritime association to bust
the union. Primary among shipper demands is that the union discontinue
the old hiring-hall-and-chalkboard system of worker dispatching -- which
requires workers to physically show up at a union hall before reporting to
the job -- in favor of an automatic telephone dispatch system. Shippers
say a revised system would mean workers could spend more time on
the job; the union says it would be weakened by such a system, which
could create the impression that hiring authority had been removed from
union hands.

If the negotiations fail and a strike is called, the financial fallout
would be large and, perhaps, global in scope. "Most people don't quite
recognize that this is a pretty contentious set of negotiations," says Jack
Kyser, chief economist at the Los Angeles County Economic Development
Corp. "I've seen reports that the effect of a lockout would be $1 billion to
$2 billion a day."

After a day's strike, New York financiers holding debt in Taiwan and
Singapore might begin to sell, says Cohen, the Berkeley economist. Such
a round of debt-dumping could start an astonishing number of financial
dominoes tumbling. As financiers sold off their Asian investments, the
value of the affected countries' currencies would begin to plummet as a
result. Asian companies, whose income would drop sharply if they
couldn't get their goods to the all-important American market via the
West Coast, might teeter. Asian countries could begin raising interest
rates in hopes of keeping investors from selling off more Asian
stocks and bonds. But the high interest rates would make it impossible
for Asian companies to borrow locally, and they would fail. If this
cycle continued for too long, Cohen says, the entire global financial
system could be at risk of cracking.

In the U.S., meanwhile, the raw-materials stocks of companies in states
all over the west and Midwest -- many of which have recently adopted
super-efficient "just in time" manufacturing techniques that allow just a
tiny inventory of supplies to be kept on reserve -- would begin to dwindle.
Very soon after a West Coast dock strike began, many U.S.
manufacturers would cease operations.

"I wish these clowns a lot of luck," says Cohen, referring to both the
longshoremen and the shippers now negotiating in San Francisco.
The longshoremen are "far from poverty-stricken, and the shipping
companies aren't exactly mom-and-pop businesses, so they can both
sit it out."

Cohen's not so sure about the rest of us.  "The risk of collateral damage
is hugely disproportionate," he says.

For all the economic portent of the dock negotiations, they also
represent a new chapter of an important political and social story,
especially here in San Francisco. Three-quarters of a century ago,
under the leadership of charismatic union president Harry Bridges,
San Francisco longshoremen really were oppressed laborers
who rebelled and briefly shut the city down. They subsequently became
one of the country's more democratic and progressive labor unions, and
at the same time won theretofore unheard-of concessions from
management.

Now, though, West Coast dockworkers are the labor movement's
aristocrats; their leaders pay lip service to a laundry list of foreign
and domestic leftist causes, while in reality behaving like any other
narrowly focused interest group. Shippers, meanwhile, are talking
about moving more goods through the Panama Canal, setting up
distribution operations along the American Gulf Coast -- in short,
changing trade routes so that West Coast longshoremen become a
Rust Belt union along the lines of the Midwest's long-beleaguered
steelworkers.

"To use a Harry Bridges-ism, they're [the longshoremen] after pork
chops," says former Chronicle labor editor Dick Meister, who believes
the Bay Area public will probably never read much in the way of daily
newspaper stories about the apex and decline of the ILWU, the last of
the nation's great labor unions. So far, the Chronicle has carried just a
short story announcing that the shippers and longshoremen had entered
negotiations. The possible global repercussions of a dockworker strike,
and the domestic fallout if West Coast longshoremen reach too far
and drive significant amounts of business to other ports, have gone
undiscussed.

"You won't get much [coverage] until they're actually walking the picket
line," Meister says.

But by the time regional newspaper editors are forced to pull somebody
off the business desk and send him to ILWU headquarters, it might be too
late. San Francisco's biggest-ever business story will be well under way,
and there won't be a reporter to spare.