There are several key threats facing economic growth early in the new year, but as of this afternoon, one of them has been resolved.
A strike that could have crippled 15 major ports on the East Coast and the Gulf and put a crimp in the nation's commerce has been avoided after dock workers, port operators and shippers agreed to a deal that extends the workers' contract, a federal mediator said Friday.The parties settled on a 30-day extension of the contract after a meeting Thursday with Federal Mediation and Conciliation Service Director George H. Cohen, the FMCS said in a statement.The parties had faced a Saturday deadline for resolving the labor dispute. The International Longshoremen's Association, which represented the dock workers, had threatened to strike a day later.
The story hasn't generated a lot of attention -- the threat of economic damage from Congress has understandably dominated headlines -- but the port dispute had the potential to do sweeping damage to commercial activity, closing over a dozen of the nation's largest ports along the East and Gulf coasts.
At issue were "container royalties," which describe the existing cap on dock workers' payments based on container cargo weight. With that dispute resolved today, an extension will be approved, and negotiators will be able to reach a larger labor agreement over the next 30 days.
Had the strike occurred, business groups estimated it would have cost the economy about $1 billion a day. President Obama also would have been under intense pressure to use emergency powers and stop the strike -- an action he did not want to take.
With today's breakthrough, the White House can direct its attention to all the other ways the fragile economic recovery is in peril.