The cliff that America sidestepped with time to spare in 2012 was the one on the nation's docks. On Dec. 28, harbor operators and shippers reached an agreement with the union representing nearly 15,000 longshoremen on the East and Gulf coasts. The key point holding up the signing of a new contract was whether dockworkers would continue to receive royalties on the containers they hoisted on and off ships.
With that issue resolved, apparently to the workers' satisfaction, their union agreed to call off a year-end strike pending the resolution of less contentious points, and the nation was spared a work stoppage that would have slowed imports and exports to a relative trickle.
Had the workers walked, the attacks on them would be easy to imagine. Dockworkers are among this country's best-paid blue-collar workers; many make more than $100,000 a year. They're sitting ducks for union critics and are objects of wonderment for many Americans who can't fathom how nonprofessional work can pay so much.
Unraveling the mystery of longshoremen's pay, however, goes a long way toward explaining the U.S. economy and its possible futures. The four reasons dockworkers make what they do are, first, there are so few of them; second, they're highly skilled and productive; third, their work can't be relocated; and, fourth, they have had powerful unions.
In the 1950s - the time of the film "On the Waterfront" - 35,000 longshoremen were employed at the Port of New York and New Jersey. Today, there are just 3,500, loading and unloading much more tonnage than their more numerous predecessors did. The difference, of course, is that beginning in the 1960s, cargo has been shipped in massive containers that are placed on trucks or railcars. The longshoreman's job has changed from hoisting much smaller loads with slings to running the giant cranes that move the containers between ship and shore.
The current task requires radically fewer, though better-trained, workers than the old process did. The changeover began when West Coast longshoremen (later followed by their counterparts on the East and Gulf coasts) crafted a bargain with employers: They would agree to have their numbers greatly reduced, but the workers who remained on the docks would get a share of the huge gains in productivity and profits that came with containerization. (Those who lost their jobs, they agreed, would receive generous payouts.) There might come a time, Harry Bridges, the legendary president of the West Coast union, is said to have remarked, when it would take just one longshoreman to load and unload all the cargo at U.S. harbors - but he'd be a union member and "the best-paid son of a bitch in the United States."
The theory behind the dockworkers' pay may seem unexceptional: As workers grow substantially more productive, their numbers should shrink and their pay should rise. In practice, however, the vast majority of U.S. workers who are substantially more productive than their predecessors (chiefly, those in manufacturing) have seen their numbers slashed but their pay frozen, if not reduced. Only workers with powerful unions, such as steelworkers (an industry where it takes a worker two hours to produce the amount of steel it took 10 hours to produce 30 years ago) and longshoremen, have seen their pay rise with their productivity.
Time was when U.S. workers' wages ascended at the same rate that productivity increased, but those trend lines began to diverge in the 1970s, as unions began to shrink. Today, with unions in the private sector all but vanished, gains in productivity go only to the wealthiest 10 percent of Americans - largely, to owners and shareholders.
The mechanization of work that dockworkers have experienced is sure to accelerate across the economy as robotic technology becomes more sophisticated. Google has already perfected the driverless car; how long before FedEx decides to dispense with its drivers? Will the remaining workers have the power to claim a share of their employers' productivity gains? Will the citizenry have the power to redistribute through taxes some of the employers' wealth to would-be workers whose would-be work has been rendered redundant by machines? The comforting story we tell ourselves - that just as unemployed farmworkers found jobs in factories in the 20th century, so unemployed factory workers will find postindustrial jobs in the 21st century - has already been called into question by declining rates of employment and labor-force participation.
In a world of smart machines, how will the remaining workers fare? The lesson of the longshoremen is that workers, no matter how productive, also need power if they - and the nation - are to prosper.
Harold Meyerson is editor-at-large of The American Prospect.