Port workers along the East and Gulf Coasts have gone on strike, demanding higher pay and job security with AI on the rise. But how long do Americans have before this strike affects the economy? Should you rush out and stock up before groceries become scarce? Or is there no need to panic? Glenn reviews what will likely happen week by week if the strike continues, including how long it will take for this to have months-long effects that impact the holidays. Plus, Glenn asks, why is this happening right before the election?!
Transcript
Below is a rush transcript that may contain errors
GLENN: Okay. Let me take you first to another issue. You get up this morning, scrolling through your phone. Checking your news feed. Have a cup of coffee. Then there's this headline. US port workers begin nationwide strike.
Hmm. Okay. Good. Good.
Now, we could -- you could just blow this off, because of the ports, and, you know, dock workers sounds distant.
STU: It was the worst season of the wire.
GLENN: Okay.
STU: It's kind of the one you skip, I feel like.
GLENN: Okay. This one is about to reach out into your home. Your wallet. Your daily life.
So I need to explain what's coming our way.
First, in week one, in the first week, you might not notice much.
So there's no reason to panic. You can go and, you know, go to the store. Stock up on some things. But there's no reason to run out and do that, this week.
Your online orders are still arriving. Maybe you hear a blip on the news. About some ship stuck offshore. For a few industries hinting at some delay. But for most people, life will go on as normal, during week one. It started last night.
Now, behind the scenes, things are starting to shake and crack a little bit. Retailers, manufacturers, and businesses, that depend on regular shipments are beginning to feel the pinch, in week one.
The just in time supply system, you know, that we all learned about in COVID. That's beginning to have a little bit of a strain. And it's starting to wobble a little bit.
And while the shelves are still full for now, the stockrooms in the back are running thin. By week two, by the second week, you're going to start feeling things.
So next week, maybe midweek. If it's still going on, maybe you head for the store, and something as simple as bananas or a pair of new shoes. Suddenly the shelves aren't as full, some items just aren't there.
Fresh avocados or berries that you've gotten used to, are sitting on ships waiting to dock. And it's not just food. It's electronics. It's clothing. Even toys for your kids. They start becoming harder to find.
Prices, by week two, they may start on some items to inch upward.
Businesses are now scrambling to get their hands on what's left.
And the competition drives up cost.
That cheap TV, that you were thinking of buying, you may have to add anywhere from ten to 30 percent to the price tag.
By the end of week two.
If you were planning on doing some home repairs or upgrades.
Good luck.
All of the tools and materials are sitting in crates, gathering dust at the ports.
This is also a problem. Because of the hurricane. Had anything that you get at Home Depot is going to be in short supply, because of the hurricane, and by week two, the dock worker strike.
Now, by the third week, if it goes on that long, now we're getting into some problems.
It's no longer just a shortage of bananas or phone chargers. Entire industries begin to slow down. Factories that rely on parts from overseas. Just in time.
Can't keep running. So the workers in those factories. People you might know. Maybe it is you.
Are getting furloughed. Sent home without pay. Because there's nothing for you to build.
Grocery stores begin to ration some items. And limiting on some items how much you can buy.
Now, at this point, the strike is not a nuisance. This is week three. This point in week three, it becomes a crisis.
The online orders you placed, delayed. Weeks out. Businesses are pleading with the government for help by now.
But even if the strike ended, in week three, it would take weeks to untangle the mess at the ports. By now, inflation is beginning to rear its ugly head. Everything from groceries to gas to clothes is more expensive, than it was just two weeks ago.
Week four. This is -- this is when it becomes the full weight of the strike, is unavoidable.
And I believe it becomes a national security problem. And possibly by this time, in week four, it is just one part of what I am looking for. And will explain later on in the show.
A polycrisis. A polycrisis is what will take us out in a knockout blow. And you already have a little bit of a polycrisis with the dock workers and the hurricane.
Small businesses are now closing their doors. Because they can get their inventory. Grocery store shelves are sparse with some items missing altogether.
Your favorite brands might be out of stock. Maybe you head to the hardware store. Only to find that the building materials that you need are either unavailable or so expensive, they're out of reach.
Now, let's talk long-term. Timing couldn't be worse. Because we're heading into fall. And you know what that means. The holiday season.
Retailers are counting on the next few months for a huge chunk of their sales. And the Christmas gifts you've been eyeing. There's a good chance, they won't make it in time for Christmas. Toys, electronics. Clothing. They're sitting in ships. Or back ordered in factories. They can't get the parts. Even if the strike ends after four weeks. The backlog will last for months. Shipping will be slow.
And prices, you'll be paying a premium for anything you can find. So here's -- here's what you need to know: Week one, just be aware.
If you want to get some fruit. And you have some extra fruit in the house. You know, for week two, if it goes on that long, great.
I can't imagine, that strike goes on very long.
Because it will create a national emergency.
However, I'm not sure if our president is too busy lathering on sunscreen at the beach.
Or if his goals are just not the same as our goals.
To keep America safe and healthy.
So I don't know why. Remember the train negotiation?
You know, when you kept the trains running. He got involved immediately.
And he made sure that strike didn't happen. Well, where is he now?
And the media is saying, well, he can't really do anything.
He can't really -- maybe in a couple of weeks. Really? Maybe in a couple of weeks.
He stopped the train thing from going in to strike. Why isn't he involved this time?
He's Mr. Labor Union.
So I don't know. What's happening. In -- in a normal America, the president would make sure this strike was settled. But wait until you hear what they're asking for. And what they've already turned down.
So for, if it goes four weeks, truckers, rail workers. Warehouses will be overwhelmed, trying to just move everything.
Prices will stay high through the holiday season.
Supply chains will struggle to recover. Holiday shopping season will be lienor, fewer options on the shelf.
Less to spend, because inflation will chip away at your budget again. The economic hit, won't be limited just to higher prices.
Jobs will be lost, as industries scrambling to adapt disruptions. Companies may start to shift operations to avoid reliance on our US ports in the future.
That's great, huh.
Potentially relocating manufacturing or looking to automate more of their processes to reduce reliance on labor.
That will mean fewer jobs for the very workers that are striking today in the long-run.
So when you hear about the port thing. Know, this is a very serious issue.
Not today, but if you want to be prepared. You might not go crazy at a Costco.
Just make sure you have what your family needs, in case things get worse.
Because I have no idea, what will happen.
Okay. So, you know, when you hear what the dock workers are striking for, maybe you think, it's reasonable.
But let's get into the details. They're striking for two big reasons.
One, they want higher pay. Everybody does. They want assurances, that their jobs won't be taken over by machines. By automation. Everybody wants that.
Got it. So on the surface, it sounds reasonable.
Everyone wants better pay. No one wants to lose their job to a robot. But when you start unpacking what they're asking for. And comparing it to the average American worker. And when you consider the long-term effects on our country's economy, especially in competition with China, picture gets a little more complex.
Okay. First, let's talk about the pay raise.
The average longshoreman, the dock workers already make about 100,000 to $200,000 a year. Six figures. Some even earn more when you factor in over time.
Now, if you compare that to the average American worker who pulls in around $56,000 a year. That's quite a gap. Now, they're not not just asking for more.
They are pushing for significant raises. Sometimes ten to 15 percent a year, or even higher, depending on the location and the union negotiations. For someone already making $100,000, that could mean a ten to 15 or 20,000-dollar raise, every year.
Meanwhile, the average American worker, we're lucky to see a two or 3 percent raise. Lucky!
In fact, with inflation running hot, many workers are losing purchasing power. And wages are not keeping pace with inflation and the cost of living.
But it isn't a small pay raise. Over the term of the next six years, they are asking for a 77 percent pay raise, over the six-year life of the contract.
Now, they've been offered a 50 percent increase, and have turned that down.
Now, the -- the dock workers in California, and the west coast, they've got a 34 percent pay raise over the course of their -- their contract.
These guys are asking for 77 percent increase over the next six years.
Been offered 50 percent, and have turned it down, walked away.
Okay. I mean, that -- I mean, that's going to be hard for people to swallow.
And understand, I get it. Dock work is tough. It's physically demanding. It's risky.
It's not an old man's game. But the pay is already far above the national average. And their demands for even more, seem a little out of sync with what most people are experiencing in their lives. And I am for people making as much money as they can, but we're all connected and everyone has to remember, this is a business. All of this stuff has to work for business. Everyone has to win, because if it's just the dock workers, nobody wins.
Even at a 50 percent pay increase, that is going to be passed on to you, in higher costs.
And that's not the real problem. The real problem comes in what their second demand is.
The dock workers want ironclad guarantees, that the ports will not replace any of them, with a machine.
Now, think about that for a moment.
They're asking for a commitment, that even as technology advances, ports won't introduce things like automated cranes, or self-driving trucks or robotics to do the work faster, cheaper, more safely and efficiently. This is a conversation that America and the world should have had 20 years ago, and I talked about it 20 years ago.
And I talked about it every year since. We're going to come to a time, where if you don't know, what the meaning of life is, you're going to be kind of upside down.
Because people are going to start losing their jobs. Maybe we should start looking at the jobs of the future, and start training people for those.
Because the average job is going away. Well, now you're in it.
This is like AI. Should have had -- should have had that discussion 20 years ago.
But now we're all scrambling.
Why?
Because there is no leadership in this country.
That's why. There's no real leader. And without vision, without a leader, with vision. The people will perish. And that's what's happening. So I can sympathize with the dock workers. No one wants to be told, we have a machine that can do your job faster and without breaks, good luck. But here's the thing, automation is happening. Just like AI thousand. It's too late to stop it.
It's happening. So now, we have to figure out, how do we retool instead of just saying, you know what, you're out. How do we retool?
Because if we don't retool, if we are acting like people who said, the horse and buggy have to be kept, we lose.
China, their ports. Have you seen the video, that's circling the world now?
The ports in China are highly automated.
It's like one office. And the whole port runs in one office.
They move goods faster. More efficiently. Than we do.
They have automated cranes. AI-driven systems.
The robots work around the clock.
Minimal human influence.
It is safe safer, faster, cheaper.
This allows China to process millions of more containers, than we do, at a fraction of the cost and time.
Why do you think people buy their products from China? Because through slave labor and now through automation, they can make it cheaper.
If we don't automate our ports, we are putting ourselves in a advantage for a long-term knockout punch.
Global trade is cutthroat.
Companies will ship through countries and ports, that can move their goods faster and cheaper.
And if the US sticks with old, labor intensive methods, shipping companies will look elsewhere, to countries like China. That can get the job done more efficiently. This will mean lost business for US ports.
Fewer goods flowing through our economy. And ultimately, fewer jobs for dock workers in the long run.
We, I'm sorry, gang. Have to automate.
To be able to compete in today's world.
If you're willing to go back and live like the old timey days, where, you know, back in the -- you know, back around the turn of the century, 80 percent live below the poverty line.
Okay. 80 percent of Americans. So if you want to go back to that, that's fine.
But we have a Brave New World, that we are facing now.
And these dock workers are in trouble.