Fresh Round Of Disputes Could Further Hurt Regional Economy
Long-haul truck drivers who serve the ports of Los Angeles and Long Beach voted Saturday to strike, raising the possibility of a new round of disruptions to ports that have already been hurt by union actions. Teamsters spokeswoman Barb Maynard says the ports’ drivers have been victims of “persistent wage theft.” Weston LaBar, Executive Director of the Harbor Trucking Association, said in a statement, “I believe now is a horrible time to introduce any slow-downs to the supply chain.” LaBar continued, “If they want to be a part of the real solution perhaps they should suspend these efforts until we get closer to a normal flow of cargo in the San Pedro Bay. We don’t want to put any more jobs in our region in jeopardy.”
One of the most contentious topics in the dispute is the classification of many of the port’s 16,000 drivers as independent contractors. Instead, many drivers want to be made full employees of shipping companies. Independent contractors work for one or more companies but are not required to receive the same level of benefits as employees. One example: contractors are not covered by Obamacare’s onerous employer mandate. Independent contractors provide the basis of several popular companies, but the practice has raised legal questions. For example, Uber contends it is not liable for accidents that happen when one of its drivers is not actively carrying a passenger, and California-based contractors with tech startups Homejoy and Postmates recently filed lawsuits demanding that they be reclassified as employees.
What Happens Next
Negotiations will continue between port management and the labor union in hopes of reaching a rapid agreement.
What This Means For Small Business
A large portion of the nation’s imports and exports pass through large container ports. Estimates made earlier this year projected that a worst case scenario of west coast port closures could cost the US economy two billion dollars every day. A transportation crisis in Los Angeles and Long Beach would have negative repercussions for small businesses throughout the region. More broadly, the dispute over independent contractor status directly affects small businesses. Independent businesses across the country both work and hire under contract.
Additional Reading
Other news media outlets covering the incipient labor action include the AP, Reuters, KCAL-TV, and the Journal of Commerce. The San Francisco Chronicle carries an overview of calls for independent contractor reform across several industries, and another San Francisco Chronicle piece describes the Homejoy and Postmates lawsuits in detail.
