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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.
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.
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.
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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