Hire More Heroes Act of 2015
Floor Speech
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Mr. GARDNER. Mr. President, I rise to speak about the west coast port slowdown and comments that were made by the administration as they relate to that slowdown, along with legislation I have introduced called the PORTS Act, legislation I hope to pursue during the transportation debate we are going to commence with over the next several days and also as it relates to that west coast port slowdown, the economic impact that slowdown had on our economy.
On June 30 of last year, the labor contract that covered nearly 20,000 workers at 29 west coast ports expired. Port management and the ILWU began negotiations a year before, but in September of 2014 those talks ground to a standstill. Instead of remaining at the table and trying to find a solution and negotiating in good faith, both parties decided to begin jockeying for leverage.
The longshoremen purposefully slowed down their work and drastically decreased productivity while still taking home a full day's pay. In the real world, employees can't show up at work and not do their work or slow it down dramatically, not have the productivity they are expected to, and still get everything they want, but in the back worlds of labor union politics at the ports, that is business as usual. And business has been good at the ports.
According to employer data, a full-time longshoreman earns about $130,000 a year, full-time employment $130,000 a year, while foremen earn about $210,000. That is a pretty good paycheck, and the contract raises these wages even higher.
Workers pay nothing for health coverage that includes no premiums and $1 prescriptions. Providing this health care costs employers about $35,000 per employee per year. They are also eligible for a maximum pension of over $80,000 per year upon retirement, so $130,000 salary for a longshoreman, $210,000 if you are a foreman, $35,000 for health benefits, and $80,000 per year worth of pension upon retirement.
But what happened for the rest of us this past year when the slowdown occurred on the 29 west coast ports, the effect of the slowdowns weren't just limited to the port owners. When the longshoremen decided to slow down their work, the goods flowing through these ports backed up and international trade ground to a halt.
This has had devastating economic impacts in States far beyond the west coast and around the Nation as a whole. Nine excruciating months after the labor contract expired, the parties finally reached a deal but not before costing U.S. businesses and consumers billions upon billions of dollars and ruining the credibility of our exporters abroad.
When it comes to the administration, though, the response was pretty alarming as well. Labor Secretary Perez was just asked about this economic disaster of the west coast ports slowdown when visiting the ports of Los Angeles and Long Beach. His response: ``The collective bargaining process worked.''
As a result of the west coast port slowdown, the administration's response was: ``The collective bargaining process worked.''
The Labor Secretary made these comments while visiting Los Angeles, Long Beach, the two busiest ports of the country. So let's take a look at what the collective bargaining process did at those ports. This is a ship finder map of Los Angeles and Long Beach showing ships anchored offshore this week. This is recent data. These are ships that are anchored off the shore of Los Angeles and Long Beach just this past week. This is what it looks like when the ports are operating and functioning normally.
You will notice there is a lot of blue ocean and not many ships anchored offshore. Ships can quickly unload imported products and load American-made exports for distribution around the world. There is no backup, no congestion, and no disruption to our country's economy.
But this is what Los Angeles and Long Beach--the ports of Los Angeles and Long Beach--looked like during the slowdown during the crisis. Dozens upon dozens of ships anchored and idled waiting for ships in port to be unloaded.
You can see all the ships that are backed up compared to the previous chart. The Journal of Commerce reported that there were 32 ships anchored off the ports of Los Angeles and Long Beach at one point during the slowdown. There has been a lot of discussion recently about the need for a long-term surface transportation bill that invests in 21st century infrastructure, but just take a look at the kind of dysfunction antiquated labor laws can cause.
This is an aerial shot. You can see this is off the wing of an airplane where you can see all of the ships that are backed up waiting at these ports to be unloaded, ships that carry the goods for our economy, the goods that make our economy run. Congestion like this is a nightmare for American farmers, businesses, and consumers.
Farm exporters were charged exorbitant fees for warehouse space to store their agricultural goods as they rotted and spoiled. Meat and poultry companies alone faced port charges in excess of $30 million per week. So if people were earning $130,000 a year and not doing their work unloading ships, American farmers, poultry, and meat producers were charged $30 million per week. Businesses further up the supply chain were also affected.
One large U.S. base manufacturer has calculated the cost of lost sales, warehouse space, additional inventory, and transportation at $100 million in total as a result of the delays at the west coast ports. Those are just the direct costs.
American businesses also lost credibility and future customers as the foreign buyers turned to other nations for more stable supplies.
The Wall Street Journal recently reported that the west coast port delays forced layoffs and downsizing in the U.S. leather industry.
Chinese tanners are now turning to European and Brazilian producers to fill their orders. This is a $3 billion industry that had to lay off workers because of the dispute of the west coast ports.
Apparently, the administration again thinks the process worked just as it was supposed to work. Efficient trade through U.S. ports is critical to maintaining and growing economic opportunity in States across this country. According to the American Association of Port Authorities, U.S. ports support 23 million jobs, and the value of related economic activity accounts for 26 percent of our national GDP. Twenty-six percent of our national GDP comes from our ports system. Contract negotiations related to labor disputes at our ports clog up these vital arteries and cause problems throughout our national supply chain.
If you need further proof of whether this impacted our economy--that picture we just saw of all the ships stacked up at L.A. and the ports in California--according to Federal Reserve economists, the disruptions on the west coast were great enough to affect the entire economic output of the country.
This chart shows the quarterly change in national GDP. Once negotiations stalled, you will notice GDP growth started to decline. So here we are in the third quarter of 2014. Remember, we started talking about September of 2014, when the slowdowns really started. By the time we get to the last quarter of 2014 and the first quarter of 2015, you can see the labor dispute contributing to the decline of our national GDP. Our economy shrank as a result of port slowdown.
In the first quarter of this year, when the slowdowns were in full swing, the economy actually shrank by 0.2 percent. You can see it, in the third quarter--this is the last quarter--to the first quarter of this year. Twenty-six percent of our GDP depends on these ports.
The Fed economists also found that disruptions disproportionately affected exporters sending American-made goods abroad for sale overseas. Exporters didn't have access to imported raw materials and parts they needed to build their products. This caused supply chains to back up and eventually reduced output and employment.
So the Fed is telling us that the collective bargaining process at the ports measurably reduced economic growth and American jobs across the country by crippling American businesses, but only in the backward worlds of labor union politics could this economic disaster be considered everything is working just fine. Only in a union-dominated industry could this catastrophe be considered a success.
That is why I have introduced the PORTS Act. Our legislation would discourage disruptions at U.S. ports and incentivize speedy resolution of disputes by strengthening and expanding the well-known Taft-Hartley process.
Over 100 national agricultural, manufacturing, and retail organizations support the PORTS Act because they are fed up with the status quo. They disagree with the administration, which thinks shrinking our economy is everything working just fine.
There are some who oppose the PORTS Act, and those are the labor unions. In fact, earlier this month, the AFL-CIO put out a statement saying legislation like the PORTS Act was not needed. You can see what has happened without the PORTS Act is economic decline, people being laid off, farmers losing millions of dollars, products rotting in warehouses because of the backups.
In just 5 years--5 years from now--the labor contracts on both the east coast and the west coast will expire. Imagine what would happen if we had labor disputes occurring on the west coast and the east coast at the same time, people who were willing to threaten that 26 percent of our national GDP over a dispute, while the administration says everything is working just fine. It is critical we have the necessary tools in place to prevent another debilitating crisis.
If we learned anything from this past dispute, it is that Labor Secretary Perez is wrong--the current process does not work. And the AFL-CIO is wrong--legislation like the PORTS Act is desperately needed.
I urge my colleagues in the Senate to join me in supporting this important legislation. Let us not pinch our economy in an economic vice from the east and the west. Let's find economic opportunity to grow our Nation together.
Mr. President, I yield the floor.
I suggest the absence of a quorum.
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