The world’s key workers threaten to hit the economy where it will hurt

An upsurge in strikes and other labor protests threatens industries around the world, especially those that involve the movement of goods, people and energy. From railroad workers and portworkers in the United States to natural gas fields in Australia to truckers in Peru, employees are demanding better conditions as inflation eats away at their wages.

Precisely because their work is so crucial to the global economy right now – with still-fragile supply chains and tight labor markets – these workers carry weight at the bargaining table. Any disruption caused by labor disputes could worsen shortages and soaring prices that threaten to trigger recessions.

It encourages workers in transport and logistics – which cover everything from warehouses to trucking – to stand up to their bosses, according to Katy Fox-Hodess, lecturer in labor relations at Sheffield University Management School in the UK . She highlights the already difficult working conditions in the industry after years of deregulation.

The workers carry the weight

“Global supply chains weren’t calibrated to deal with a crisis like the pandemic, and employers really pushed this crisis off on the backs of workers,” Fox-Hodess says.

For their part, central bankers worry that workers are being overpaid and triggering a wage-price spiral like the one that drove up inflation in the 1970s. signs of this, with wage gains generally below prices, in part because organized labor is less powerful overall than it was then.

But that may mask another problem. Much of current inflation stems from specific choke points – and social unrest in these key industries could have wider ripple effects on prices. A threat of a strike by Norwegian energy workers, for example, caused further tremors in European natural gas markets earlier this month.

There is also a risk for the rebalancing of economies. During the pandemic, people bought more goods at the expense of services like plane tickets or hotel rooms, putting pressure on supply chains and fueling inflation. Consumption habits are expected to return to normal, with consumers eager to travel again. But strikes by cabin crew at Ryanair Holdings Plc, or workers at Paris and London airports, are adding to the travel turmoil that could put off would-be tourists.

Here’s a roundup of some of the hotspots of labor unrest rocking the global economy.

Trains and trucks…

In the United States, where a long-declining labor movement is showing signs of reawakening as unions take hold at companies like Starbucks Corp. and Inc., some of the biggest disputes involve the transportation industry. The threat of a railway strike that could cripple the flow of goods looms over the country’s already strained supply chains.

After two years of unsuccessful negotiations with the nation’s largest railroads, President Joe Biden this month created a panel to resolve a deep rift between 115,000 workers and their employers. The Presidential Emergency Council has until mid-August to propose a contract plan acceptable to both parties.

“There’s a very tight labor market, which puts workers in a position where they both have a backlog of grievances and feel empowered,” said Eli Friedman, an associate professor at Cornell University. The school has tracked 260 strikes and five lockouts in the United States. involving approximately 140,000 employees in 2021, resulting in approximately 3.27 million strike days.

In the UK, train drivers are announcing they will strike on July 30, and two other transport unions are also planning 24-hour walkouts next week. It’s not just passengers who will suffer: AP Moller-Maersk A/S, the world’s second largest container shipping company, has warned that the actions will cause “significant disruption” to the movement of cargo.

Canada has also seen strikes on its railways – part of the biggest wave of labor disputes in the country in decades. Tens of thousands of construction workers also went on strike earlier this summer. In May, 1.1 million working days were lost due to work stoppages, the highest monthly total since November 1997.

In many countries, truckers protesting high fuel prices have been at the forefront of social unrest. Truckers in Peru are staging a national strike this month. In Argentina, roadblocks by drivers in June lasted a week, delaying around 350,000 tons of crops – about 10 small ship shipments. In South Africa, drivers blocked roads, including a key trade link with neighboring Mozambique, during a protest against record prices at the pump.

…And ports and ships

The labor dispute that worries observers of the American economy the most is the one involving more than 22,000 dockworkers on the West Coast. Their contract expired in early July and the International Longshore and Warehouse Union is negotiating a new one. Both sides say they want to avoid shutdowns that could close ports handling nearly half of US imports.

Meanwhile, the Port of Oakland, California’s third busiest, had to close some of its gates and terminals last week – adding to wait times for imported goods – because truckers blocked access to protest a gig law that could take 70,000 drivers off the road.

German ports are scrambling after a two-day strike earlier this month deepened freight bottlenecks that plague shipping and hurt Europe’s biggest economy.

In South Korea, the shipbuilding industry saw an increase in orders amid a supply chain crisis. Workers have been protesting for several weeks at a Daewoo Shipbuilding & Marine Engineering Co. wharf in the southern town of Geoje, demanding a 30% pay rise and a reduction in their workload. The action has already delayed the production and launch of three ships, and President Yoon Suk Yeol has urged ministers to resolve it. A resolution seemed to be near as of this weekend.

Air transport chaos

Labor disputes have contributed to Europe’s summer of travel chaos, with airlines and rail companies already short-staffed following the pandemic slump in labor markets. Carriers like Ryanair, EasyJet Plc and Scandinavia’s SAS have seen their schedules disrupted by strikes.

A walkout at Charles de Gaulle airport outside Paris forced the cancellation of flights, and London’s Heathrow airport risked a similar fate before Unite Union called off a proposed walkout on Thursday, saying that he had received a “sustainably improved offer” of salary increases. .

Even in normally relaxed Jamaica, flight controllers staged a day-long strike on May 12 over low pay and long working hours, shutting down Jamaican airspace and disrupting travel for more than 10,000 people in Caribbean island. At least one plane was forced to return to Canada halfway through.

energy crisis

A strike by oil workers in Norway has threatened to deal another blow to Europe’s energy supplies, which have already been hit by war in Ukraine with a reduction in gas flows from Russia. The dispute was resolved when the government stepped in to propose a mandatory wage commission. The country’s labor minister said she had no choice but to intervene, due to the potential for “considerable societal impacts for all of Europe”. A further escalation of the strike could have stopped more than half of Norway’s gas exports.

Read also : Russia resumes Nord Stream natural gas supply to Europe

In Australia, one of the world’s leading exporters of liquefied natural gas, workers at Shell Plc’s Prelude floating LNG production facility in Western Australia have extended industrial action until August 4, according to the Offshore Union. Alliance. The shutdown halted loading at an export facility, exacerbating global fuel shortages.

Read also : Europe is being tested again, this time by energy, inflation and Putin

Union groups at the South African state-owned company Eskom Holdings SOC Ltd. secured a pay rise that roughly keeps pace with inflation after a week-long walkout that worsened power outages across the country – and was illegal under laws banning Eskom workers from striking because the provision of electricity is considered an essential service.

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