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The pandemic has put unprecedented strain on global supply chains -– and also on the workers who’ve kept those systems running under tough conditions. It looks like many of them have had enough.
A surge in strikes and other labor protests is threatening industries all over the world, and especially the ones that involve moving goods, people and energy around. From railway and port workers in the US to natural-gas fields in Australia and truck drivers in Peru, employees are demanding a better deal as inflation eats into their wages.
Precisely because their work is so crucial to the world economy right now –- with supply chains still fragile and job markets tight –- those workers have leverage at the bargaining table. Any disruptions caused by labor disputes could add to the shortages and soaring prices that threaten to trigger recessions.
That is emboldening employees in transportation and logistics -– which spans everything from warehouses to trucking — to stand up to their bosses, according to Katy Fox-Hodess, a lecturer in employment relations at Sheffield University Management School in the UK. She points to already-tough working conditions in the industry after years of deregulation.
Workers Bear Brunt
“Global supply chains weren’t calibrated to deal with a crisis like the pandemic, and employers have really pushed that crisis onto the backs of workers,” Fox-Hodess says.
For their part, central bankers have been fretting about workers getting paid too much and setting off a wage-price spiral like the one that sent inflation soaring in the 1970s. In fact there’s not much sign of that, with wage gains generally lagging behind prices, partly because organized labor is broadly less powerful than it was back then.
But that may mask a different problem. Much of today’s inflation stems from specific chokepoints -– and labor unrest in those key industries could have wider ripple effects on prices. A threatened strike by Norway’s energy workers, for example, sent fresh tremors through European natural-gas markets earlier this month.
There’s also a risk to the rebalancing of economies. In the pandemic, people bought more goods at the expense of services like plane tickets or hotel rooms, putting pressure on supply chains and stoking inflation. The expectation is that spending habits will revert to normal, with consumers eager to take a trip again. But strikes by cabin staff at Ryanair Holdings Plc, or airport workers in Paris and London, are adding to the travel turmoil that may put would-be tourists off.
Here’s a roundup of some of the hot spots of labor unrest rattling the global economy.
Trains and Trucks…
In the US, where a long-declining labor movement is showing signs of awakening as unions establish footholds at companies like Starbucks Corp. and Amazon.com Inc., some of the biggest disputes are in the transportation industry. Looming over the country’s already battered supply chains is the threat of a rail strike that could paralyze the movement of goods.
After two years of unsuccessful negotiations with the nation’s largest railways, President Joe Biden this month established a panel to resolve a deep rift between 115,000 workers and their employers. The Presidential Emergency Board has until mid-August to come up with a contract plan that’s acceptable to both sides.
“There’s a very tight labor market, so that puts workers in a position where they have both an accumulation of lots of grievances and they feel empowered,” Cornell University associate professor Eli Friedman said. The school tracked 260 strikes and five lockouts in the US involving about 140,000 employees in 2021, leading to about 3.27 million strike days.
In the UK, train drivers say they will strike on July 30, and two other transportation unions are also planning 24-hour walkouts next week. It’s not just passengers who will suffer: A.P. Moller-Maersk A/S, the world’s No. 2 container shipping line, warned that those actions would cause “significant disruption” to the movement of freight.
Canada has seen strikes on its railways, too — part of the country’s biggest wave of labor strife for decades. Tens of thousands of construction workers also walked off the job earlier this summer. In May, there were 1.1 million worker-days lost to stoppages, the highest monthly total since November 1997.
In many countries, truck drivers protesting against the high cost of fuel have been at the forefront of labor unrest. Truckers in Peru are holding a nationwide strike this month. In Argentina, roadblocks by drivers in June lasted a week, delaying about 350,000 tons of crops -– roughly 10 small ship cargoes. In South Africa, drivers blocked roads including a key trade link to neighboring Mozambique, in a demonstration against record pump prices.
…And Ports and Ships
The labor dispute that US economy watchers worry about most is the one involving more than 22,000 dockworkers on the West Coast. Their contract expired at the start of July, and the International Longshore and Warehouse Union is negotiating a new one. Both sides say they want to avoid stoppages that could shut down ports handling almost half of America’s imports.
Meanwhile the Port of Oakland, California’s third-busiest, had to close some of its gates and terminals this past week -– adding to the wait time for imported goods — because truckers blocked access in protest against a gig-work law that could take 70,000 drivers off the road.
German ports are scrambling after a two-day strike earlier this month worsened cargo bottlenecks that are snarling shipping and hurting Europe’s largest economy.
In South Korea, the shipbuilding industry has seen a surge in orders amid the supply-chain crunch. Workers have been protesting for several weeks at a dock for Daewoo Shipbuilding & Marine Engineering Co. in the southern city of Geoje, demanding a 30% pay hike and an easing of their workload. The action has already delayed the production and launch of three ships, and President Yoon Suk Yeol urged ministers to resolve it. A resolution looked to be close as of this weekend.
Air-Travel Chaos
Labor disputes have contributed to Europe’s summer of travel chaos, with air and rail companies already short-staffed after the pandemic squeeze on labor markets. Carriers including Ryanair, EasyJet Plc and Scandinavia’s SAS have seen their schedules disrupted by strikes.
A walkout at Charles de Gaulle Airport outside Paris forced the cancellation of flights, and London’s Heathrow looked at risk of a similar fate before the Unite Union called off a proposed walkout on Thursday, saying it had received a “sustainably improved offer” of pay raises.
Even in normally relaxed Jamaica, flight controllers staged a one-day strike on May 12 to complain about low pay and long hours, closing Jamaican airspace and disrupting travel for more than 10,000 people in the Caribbean island. At least one plane was forced to return to Canada mid-trip.
Energy Crunch
A strike by oil workers in Norway threatened another blow to Europe’s energy supplies, which have already been hit by the war in Ukraine with reduced gas flows from Russia. The dispute was resolved when the government stepped in to propose a compulsory wage board. The country’s labor minister said she had no choice but to intervene, because of the potential for “far-reaching societal impacts for all of Europe.” A further escalation of the strike could have shut down more than half of Norway’s gas exports.
In Australia, one of the world’s top exporters of liquefied natural gas, workers on Shell Plc’s Prelude floating LNG production facility in Western Australia have extended industrial action until Aug. 4, according to the Offshore Alliance union. The stoppage has halted loading at an export facility, exacerbating global shortages of the fuel.
Labor groups at South African state-owned utility Eskom Holdings SOC Ltd. won a pay increase that roughly keeps pace with inflation after a weeklong walkout that worsened the country’s power outages — and was illegal under laws that bar Eskom workers from striking because the provision of electricity is considered an essential service
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
