10 02 24 MSU Economics Professor Kishore Kulkarni on impact of longshoremen strike

Episode Transcript

Speaker 1 (00:00):
The now underway long shortman strike heading into day two,
union bosses fighting for large wage increases and commitments to
limit the automation of port jobs.

Speaker 2 (00:07):
The strike itself threatens the supply chain and the distribution
of goods throughout the country, potentially impacting the economy. Joining
us now on the KA Common Spirit Health hotline is
MSU Denver Economics professor. It's Kilshore could Carney, Professor Kulcarney.
Thank you so much for your time this morning. Our
Business and Money editor Patwitard is on this conversation as well,
as we've been talking about it at length in our

(00:28):
Business and Money news segments. I think I'll start by
opening it by asking how severe is this situation right now?
Are we going to see the panic buying? Are we
going to see the hoarding of products? Is this going
to be a situation that is more dire than what
it currently is?

Speaker 3 (00:45):
Well, it has the potential to do that, But first,
thank you for having me again, Gina. But yeah, it
has a potential of being a full blown crisis situation
if it lasts more than a say, ten days to
two weeks.

Speaker 4 (01:02):
Now, we're already seeing several business groups saying that small
businesses in particular can't endure a long strike, and they're
calling for presidential intervention. The president says he has no
intention of ordering the workers to go back to work
while negotiations continue. I would think the longer this goes on, though,
the more pressure the administration is going to be on

(01:22):
to do something.

Speaker 3 (01:24):
Yeah, I think so. I think that's a very rational
pressure as well, because the president does have an authority
to break the strike, just like President Reagan dated for
a traffic controllers strike back in nineteen eighty, because these
are essential services and I know there is a big

(01:45):
economic impact if we stay longer.

Speaker 1 (01:48):
On the same course, professor, what's the reality of negotiating
wages is one thing, But negotiating for less automation, less technology,
it sounds like it. Do you think that is something
that will be overcome or maybe set aside? But also
put out there is kind of a signal of saying
we need to preserve these jobs and not use the
technology to lose jobs, which would make them lose power

(02:09):
with any union.

Speaker 3 (02:09):
I would assume, well, there are two or three more
important things to recognize with automation. Automation probably increases the
productivity that creates more jobs in other areas. So it's
not like a pie is constant and we had to
distribute it either equally or whatever, because pie is increasing.

(02:30):
So it is not true that if the job is
done by automation, labor will lose the jobs and then
they will not find one. Well, they will definitely find
several other jobs, because, as I said, the productivity goes up. Otherwise,
we had ATM about the same thing. We have a

(02:51):
lot of mechanization replacing labor, but that doesn't me and
our employment will necessarily go down.

Speaker 2 (03:00):
Going back, you said this could have big economic impacts
if we stay on the same course. So what are
some of the biggest industries that will be facing more
challenges in this strike.

Speaker 3 (03:10):
I think the industries that are dependent on imported goods
are number one. They are going to be very much affected.
So if even a small part of your product is imported,
then you are going to find some hardships coming up soon. Well,
and let's look at it this way, that the US

(03:32):
is clearly the largest importing country in the world. We
have almost three trillion dollars worth goods imported. Fifty percent
of those goods are adopting these thirty six sports on
the East side, and clearly that will make about three
billion dollars worth imports not accessible to companies every day.

(03:54):
And that's why I said, if you wait for ten
fifteen days, we are talking about thirty billion dollars worth
material not coming in. And let's not forget there are
a lot of perishable things in there too, foods, vegetables
and all, and they need to be preserved correctly for
a long time.

Speaker 4 (04:15):
Now, if this does raise prices to the consumer at
least a little bit, are we looking at a risk
of inflation spiking again?

Speaker 3 (04:23):
Well, without doubt, I think it's not only a real
increase in prices, but there are some expected increase in
prices too. As many of us will start panicking what's
going to happen to my prices next month, we will
start stocking them up and that will actually raise the prices.
So yeah, there are expectational changes, and we do need

(04:47):
to get to the bargaining and then negotiating a table
as quickly as possible.

Speaker 1 (04:52):
In wrapping up with you, and I know it's an
inconvenient workaround, but they're sending ships in the freight to ports.
I guess in the West. But professor, when do you
see intractable these negotiations? Do you look at it from
the greater economy? You say this is the tipping point.
If it goes beyond this day, and I heard you
mention something fifteen days, then it really impacts the greater economy.

Speaker 4 (05:12):
Is there?

Speaker 1 (05:13):
Do you have an idea of when that would be?
When it's like, okay, now this is becoming way more problematic.

Speaker 3 (05:18):
I think we are looking at October fifteen to twenty
eight could be a time period when things will start
getting into the panicy mode, and we definitely don't want
to do that.

Speaker 2 (05:29):
With more on the economic impacts of the port workers
strike now in day two it's MSU Denver Economics Professor
Kills or Coil Carney