The income of US workers and consumers will fall by $4.7 billion during 2002 due to the likely effects of the West Coast port shutdown, according to a detailed, ten-page analysis released today by the consulting firm of Anderson Economic Group. The report, which assumes a 4-week shutdown, was done on a conservative basis and includes only actual losses in earnings to US persons in its damage figure.
"The port shutdown appears to be headed towards being one of the most damaging episodes of labor unrest in the past decade," said Patrick L. Anderson, Principal in Anderson Economic Group and the author of the report, "a 4-week shutdown would be comparable in damage to the 8-week GM strike in 1998."
The Anderson report notes that consumers and producers will reduce the net impact of the shutdown in a number of ways, including substituting goods, delaying purchases, and attempting to circumvent the port shutdown. However, worker wages, maritime industry earnings, and some export and import freight losses will be lost completely. "Consumers can readily delay buying cars, and over time shippers can route some freight through the Panama Canal, but dock workers, agricultural exporters, and others will lose money and not get it back," said Anderson.
The report also notes the attempts to track down the source of the $1 billion a day and $2 billion a day figures widely quoted, which in each case turned out to be inaccurate reporting. "To actually lose a billion dollars a day for two weeks, we'd have to sink the ships," said Anderson, "the impact here is large enough to be reported without exaggeration."
The review board appointed by the President, which could lead to federal intervention under the Taft-Hartley Act, will weigh the damage to the US economy.
Anderson Economic Group specializes in regional economics and market studies, and has previously completed fiscal and economic impact analyses of port expansions, industrial expansions, and strikes. AEG's past clients include governments, such as the states of Michigan, North Carolina, and Wisconsin, the cities of Norfolk, VA and Detroit, MI, and the Port Authority of Detroit-Wayne County; corporations, such as GM, Johnson Controls, and Labatt USA; and nonprofits, such as the International Mass Retailers Association, American Automobile Manufacturers Association, and Michigan Catholic Conference.