Earlier this year, the Brookings Institution released a report on Los Angeles that identified exports and tourism as key economic engines for the future. The report described "a unique opportunity to reorient the regional economy and reassert the region as a vibrant globally significant market." This past week, Los Angeles took a big step forward and a big step back in following that advice.
The long awaited Los Angeles International Airport Specific Plan Amendment Study was released, with a recommendation to move the northern runway 260 feet north to improve safety and efficiency. Yesterday, the Chamber voiced its support for this recommendation as part of the Fix LAX NOW Coalition of Business and Labor. Separating the north airfield runways by an additional 260 feet will allow the construction of a new taxiway to accommodate the new generation of larger aircraft, which are bringing millions of international visitors to our region. Also included in the recommendations are multi-billion dollar upgrades to aging passenger facilities, a transportation center and mass transit connections. This study is a major step forward toward making LAX an international gateway that we can be proud of.
While our airport is leaping forward, the work stoppage at our seaports is endangering the long-term competitiveness of our goods movement industry and the economic well-being of the entire region. Today marks a week since the 800 members of the Office Clerical Union (OCU) went on strike. Their picket is being honored by 10,000 International Longshore and Warehouse Union members, effectively shuttering 10 of the 14 terminals between the two ports.
The ships destined for Southern California have anchored offshore, docked at a terminal or diverted to other ports, some in Canada and Mexico. Each of those ships represents five warehouses worth of cargo, according to economist John Husing. Approximately $1 billion a day to our local economy is being lost.
The OCU has been working under the terms of an expired contract for two and a half years, though they may receive retroactive pay when a new contract is signed. The clerks currently earn $165,000 in salary and benefits, including 11 weeks paid time off. According to their employers, the clerks have been offered $195,000 during contract negotiations. The union argues their jobs are being outsourced. The employers contend that current workers have absolute job security but that OCU wants to mandate temporary hires when an employee is on vacation, even when the work level does not require a replacement.
The two ports, which combined is the sixth largest complex in the world, handle 43 percent of the nation's seaborne trade traffic. They are directly responsible for 595,000 jobs in Southern California and indirectly support an additional 648,000 jobs. Over a million jobs in trucking, warehousing, retail and related areas are being negatively impacted by this strike. That's a lot of families who need money for the holidays.
The dependable movement of people and goods at the ports and LAX is vital to the Southern California economy. We applaud the big step forward on LAX modernization and we strongly urge a quick resolution to the port strike. Global competition is fierce. Current and future jobs are at stake. Not only are we taking a big step backward, we are shooting ourselves in the foot.
And that's The Business Perspective.
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