Photo / Courtesy, UNE
Oak McCoy
Updated: October 3, 2024
Lengthy port strike could weigh on Maine's economy
Photo / Renee Cordes
While dozens of U.S. ports remain closed due to a longshoremen’s strike, it’s business as usual at Portland’s International Marine Terminal. Seen here on Wednesday is the container ship Bakkafoss, part of the Eimskip fleet that sails between Maine and Iceland.
A longshoremen’s strike that has closed dozens of ports on the East and Gulf coasts this week has raised concerns about the impact on Maine’s economy if the stoppage drags on.
“The key question is duration,” said Patrick Woodcock, president and CEO of the Augusta-based Maine State Chamber of Commerce. “The potential of a strike was assessed months ago, and many businesses have made preparations to manage a short-duration strike. However, the exact timing of the strike commencing now, at a sensitive time as many retailers are preparing for holiday sales, is concerning.
"The economy will not successfully manage a sustained strike that is counted in weeks and not days without material repercussions.”
Nearly 50,000 members of the International Longshoremen’s Association went on strike Tuesday after negotiations with the United States Maritime Alliance for a new six-year contract collapsed.
While Maine’s three cargo ports — in Portland, Eastport and Searsport — are not immediately affected, some economists warn of turbulence ahead in case of a protracted labor dispute.
“The longer the strike drags on, the more Maine and the entire U.S. will feel the economic strain,” said Oak McCoy, assistant professor of economics at the University of New England College of Business in Biddeford.
“We’re looking at billions of lost revenue each week and a real risk of rising prices to consumers,” he said. “This could put a drag on Maine’s economy, particularly if the strike is prolonged.”
Supply chain disruptions, for example, could spark higher inflation, with firms passing higher costs on to consumers, McCoy noted.
“We saw this pattern during the COVID-19 pandemic, when inflation was driven both by rising costs and higher markups — a trend that could repeat if the strike continues,” he said.
On the other hand, if the strike results in higher wages for the dockworkers that could benefit union employees in Maine, with positive spillover effects on local wages, he said.
“While workers are pushing for higher wages, their bigger worry is automation — a force reshaping industry and threatening job security far beyond the docks,” he noted. “The real challenge for society and policymakers is re-skilling workers to seize the new opportunities technology brings.”
Steven Cunningham, an economics and management professor at Husson University in Bangor, also foresees some bumps for Maine’s economy in case of a longer strike and supply-chain bottlenecks.
“We’ll probably see some higher prices and some job losses, which means somewhat rising unemployment depending on how long this lasts,” he said.
In addition, he notes that the wages union members are asking for “seem to be quite large,” noting that a longshoreman working more than six years already makes more than most professors at his university.
“It’s not a small number, and if you’re trying to prop that up by 77% over six years, that’s going to make a big impact on freight costs,” which have been climbing since the middle of 2023.
But Cunningham is not too worried about Maine’s economy, which he describes as stable and with a strong, hard-working labor force.
“I don’t think there’s going to be as much of an impact [of a strike] as in some other places,” he said.
In the meantime, he says the strike hits home for many of his students who hail from fishing families. The topic has even come up in class discussions this week around consumer prices.
“For them it’s very interesting and very personal,” he said.
Most Recent
Most Recent
0 Comments