Big rail strike next week could deal another blow to America’s economy

Big rail strike next week could deal another blow to America's economy
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“We’re hearing more and more that shippers and railroads are worried,” said John Drake, vice president of transportation, infrastructure and supply chain policy at the U.S. Chamber of Commerce. The Chamber is urging the two sides to reach an agreement that averts the first national rail strike in 30 years.

The National Railroad Labor Conference, which represents unions and management at the negotiating table, met with federal mediators and U.S. Secretary of Labor Martin Walsh on Wednesday to see if they could get any closer to an agreement. Unions said there was no progress.

Freight rails have generally been successful during the pandemic, so the major disagreement is not pay but rather the rules that control worker scheduling. Many of the engineers and conductors that make up the two-man crew on each train have to be “on duty” to report to work seven days a week, keeping them from making their own plans, depriving them of family time and creating their own businesses. and high turnover rate.

time consuming

Because railroad workers are subject to a different labor law than the one that controls labor relations in most businesses, it’s possible for Congress to take action to prevent or quickly stop a strike. But that will require a level of bipartisanship that was rare a few weeks ago in Washington. by-elections.
President Joe Biden prevented the strike by imposing a recess two months ago, during which a self-appointed panel known as the Presidential Emergency Board (PEB) looked at controversial issues in the negotiations and published a proposed solution.

This 60-day cooldown will end at 12:01 a.m. ET in September. 16 and Biden has no authority to block a strike at the time. Only Congress can act to prevent a business shutdown by imposing an agreement on the two parties or by extending the existing cooldown.

The PEB has proposed multiple annual increases until July 2020, when the previous contract is set to expire.

They would give workers an immediate 14% raise and additional reimbursement for hours worked since 2020. Further raises would be made in the future, resulting in a 24% pay increase over the five-year term of the contract. It will run from 2020 to 2024, plus an annual cash bonus of $1,000.

The PEB’s wage recommendations are slightly less than unions require and slightly more than management has previously offered.

But it was lucrative enough that five of the smaller unions, representing more than 21,000 railroad workers, agreed to a temporary employment agreement based on the panel’s recommendations, although they still had to be approved by grassroots members to take effect. . And the PEB’s wage recommendations would likely have been enough to garner the approval of other unions, even if they wanted more.

“We’re not going to sit here and argue. [wages] or health care. “We’re beyond that,” said Jeremy Ferguson, president of the union, which represents conductors, one of two workers who work with engineers on freight trains.

Anger at business rules

The conductors union and six other unions are preparing to strike. Representing engineers, dissatisfied with business rule recommendations and how the “on call” requirement will affect their members’ quality of life, they are deprived of leisure time with their families even when out of work.

Unions urge allies in Congress not to take action, arguing that the strike is the only way to reach an agreement that can improve the unbearable working rules that are pushing workers to quit, causing staff shortages and well-documented service problems in shipping. rail service.

“The truth is that they [the railroads] “We trust Congress to act,” said Dennis Pierce, president of the Fellowship of Locomotive Engineers and Train Men. [the union’s allies in Congress] We know we need them to stay out of this.”

“This is something Democrats say they support, a chance to stand up for the working class and for labor,” Ferguson said.

Will Congress act?

If Congress takes action, it will be a difficult political choice for the Biden administration. Biden is as pro-union as any president in history, but he doesn’t want to see any problems for supply chains, prices and the economy ahead of the critical midterm elections.

Asked about the risk of a strike, a White House official did not address the possibility of Congressional action, instead emphasizing the need for a negotiated agreement to avoid a shutdown he hoped to avoid.

“After the pandemic and supply chain disruptions of the past two years, now is not the time for more uncertainty and disruption,” the official told CNN’s Betsy Klein.

He said the White House is “ready to support the parties as they work towards a deal or voluntary extension of the cooldown.”

“We don’t take a stand on what the elements of a deal should be,” the official said. “We are confident that the parties will make every effort to negotiate in good faith towards a mutually acceptable solution, and we urge both sides to do so as soon as possible.”

Democrats in Congress may be able to impose more of a contract to the liking of the unions than is recommended by the presidential panel. However, this may have difficulty gaining the necessary Republican support to pass. Republicans could potentially benefit if a protracted railroad strike happens just before the election that causes problems in the economy, especially if the Democrats can be blamed.

Biden averted freight rail strike – for now

Even some businesses that want the dispute to be resolved without a strike are nervous about appealing to Congress.

“Obviously, it doesn’t bode well if it eventually goes to Congress,” said a business official who closely watched the potential for the strike and spoke on condition of anonymity.

“You don’t know what you’re going to get. You may have members who can suspend the law to demand this or that thing… Once Congress gets involved, it’s a mess.”

This executive believes Congress will derail the box, perhaps by extending the cooldown after election day, rather than imposing a contract. But this is still not a solution.

“Here’s the scrub, it’s been 30 days [presidential panel’s] advices. Only five of the 12 railway associations signed the recommendations,” he said.

At this point the railroads are still urging unions to accept the terms recommended by the presidential panel rather than call on Congress to act.

“It is in the interest of all stakeholders and the public that railroads and rail workers’ organizations quickly reach agreements that provide wage increases to workers and prevent rail service disruptions,” said the National Railroad Labor Conference. PEB’s recommendation as the basis for a quick and voluntary agreement.”

The rail trade group estimated on Thursday that shutting down freight rail service would cost the U.S. economy $2 billion a day. Although the proclamation said that “Ultimately, Congress has the power to mediate and prevent a shutdown,” it did not specifically call for Congressional action that encouraged the parties to resolve the dispute through negotiations.

Record profit for railways

The threat of strike comes as a variety of railroads, including: Union Pacific (UNP), Norfolk South (NSC) and of Berkshire Hathaway (quill) Burlington Northern Santa Fe reported record earnings.

Unions argue that companies profit from the backs of their employees and create conditions that push workers to quit. Employment on the country’s main railways has declined by more than 30,000, or about 20% of the workforce, since the last contract was signed in 2017.

Union leaders say their members are now at a breaking point and are willing to strike to win the changes.

“This is not a personal preference of union presidents,” said Pierce, president of the engineers’ union. “Our membership has made it loud and clear that this is not a deal that membership can’t approve of.”

— CNN’s Betsy Klein contributed to this report

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