While port workers went on a brief three-day strike last October, these workers are threatening another strike—that could shut down ports on the East and Gulf coasts and could devastate the American economy at the same time as President-elect Donald Trump returns to the White House. Taking a page out of the CEO handbook, port workers are using CEO tactics in an effort to raise wages.
With the October strike suspended until January 15, the upcoming suspension’s end means that 50,000 members of the International Longshoremen’s Association (ILA) are expected to resume work; however, the responsibility for resolving the standoff rests on the container lines and cargo handling companies that operate the ports from Maine to Texas. These companies are actively negotiating collectively as the United States Maritime Alliance.
How CEO Wages Are Making an Impact
After the killing of UnitedHealthcare CEO Brian Thompson attracted the attention of the nation, Wall Street’s single-minded focus on shareholder value and staggering increases in CEO compensation has also found itself in the spotlight.
UnitedHealth Group’s board awarded the company’s former CEO, William McGuire, $1.6 billion in stock options over the span of 15 years ($106 million per year), which was in addition to his millions of dollars in salary, bonus, and other forms of compensation. Such heavy increases in executive compensation, like McGuire’s, have fueled workers’ resolve to stand firm in their demands for better wages and benefits—even if that means walking off on the job and losing pay.
With the help of the internet, today’s workforce and union leaders have data on how C-suite executives have leveraged their positions to obtain astounding compensation packages over several decades. Beyond their salaries and bonuses, CEOs also receive long-term payouts, restricted stock options, and other benefits such as reimbursement for security, tax preparation, and a car.
To put CEO wages into numbers, according to the Economic Policy Institute research, since 1978, CEO compensation (adjusted for inflation) has grown 1,085% compared to the menial 24% increase for the typical American worker. This equates to a 24% raise per year for CEOs and a lowly 0.5% per year for workers.
Understanding Their Value
The ILA has been helping USMX increase the value of ports and ocean carriers. During the global pandemic, container shipping lines saw rates shoot up from $2,500 to over $12,000 per box. Companies like Maersk were able to fund many acquisitions and reward executives for the staggering growth of corporate wealth. But the ILA now wants something in return for its role in this enormous growth—higher wages.
The recent strike at Boeing by aircraft mechanics, which lasted for seven weeks, is an excellent example of how much workers are fed up and how damaging an employee strike can be. The aircraft mechanics strike brought Boeing to a grinding halt, and the company’s leaders paid a heavy price for ignoring the 9.5% annual pay increase over four years. The company lost $10 billion, experienced a 25% drop in the stock price, and a bond rating that degraded to near junk level.
But what this strike revealed more was that the corporate leaders receiving large paychecks for increasing shareholder value, couldn’t even assemble a single aircraft for nearly two months and protect the stock price from dropping.
The USMX has agreed to award its workers a 61.5% increase in wages over the next six years; however, it still needs ILA approval to introduce more automation at the ports to increase capacity and reduce labor costs. This wage increase can equate, specifically for dockworkers at the high end of the pay scale, to $10,000 per year. This $10,000 can help pay for expenses, such as food, rent, transportation, vacations, and household necessities, which then circulate throughout the economy and back to corporations—overall helping the economy while creating more loyal employees who are able to afford to live.
What corporate boards are failing to realize is that, of the three stakeholders, employees often show the greatest loyalty to the company, which means that corporate boards need to acknowledge and address that huge gap in compensation between CEOs and the average workers to provide a solution that will lead to fewer work stoppages that are hurting shareholders, workers, customers, and the economy.
