It wasn’t that long ago that there were grumblings of a possible rail strike threatening to bring our economy to a screeching halt, affecting Americans from coast to coast. Many wondered if President Biden could broker a deal between the railroads and the unions.
Biden used his Amtrak-loving magic to devise a tentative agreement to stave off the strike. However, as we dip our toes into December, the truth is that only some were happy with the terms brokered.
So now, Biden has kicked this problem over to Congress for them to stave off a devastating rail strike that he could not shore up himself. The reality behind this railroad situation is a bit more nuanced than most give it credit, so put on your blue and white striped rail conductor hat and let’s choo-choo our way through this mess together.
Looks like Biden is going to union-bust to avoid a rail strike. With friends like these… https://t.co/HFGu5IgvZp
— Brenden Gallagher (@brendengallager) November 28, 2022
It’s a Process
To fully grasp what is going on, it’s essential to understand the history and rules behind rail strikes. The Railway Labor Act of 1926 allows Congress to shut down railroad strikes.
When the country became increasingly dependent on rail and air transportation, the U.S. government realized there needed to be certain protections against full-on stoppages of these critical supply transportation infrastructures. To give you a cliff notes run-through of the process, a mediation process is required if the unions and management are in conflict.
We care about the Dow Jones Industrials and there is about to be a rail strike… it’s literally 1922
— Tyler Morin (@JPMorinChase) November 29, 2022
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Suppose a mediator can’t get the two sides to agree. In that case, the President convenes a Presidential Emergency Board, which President Biden did in September of this year. In this particular case, a tentative agreement was made between management and the unions.
However, the deadline to ratify the agreement is fast approaching, and only some of the unions agree to the terms, which is what could initiate a major strike. At that point, the next step would trigger Congressional action directly.
In September, the President was able to iron out an agreement that encompasses the following:
- Three unpaid days off a year for engineers and conductors to take care of medical appointments
- No penalties for hospitalizations
- 24% wage increase retroactive to 2020
Sounds like a pretty sweet deal to me. Think about it, as a union rail worker you could get a 24% bump in your pay retroactive to 2020.
Merry Christmas, right?
Well, four of the twelve unions don’t agree to the terms, and those four happen to be the largest unions in the rail business. The sticking point is a desire for rail workers to get more paid sick leave.
“We want, in this day and age of high inflation and a pandemic around illness, we would like paid sick days,” said Ohio Legislative Director for the Brotherhood of Maintenance of Way Employees Matt Weaver.
As Weaver pointed out, there is this feeling in the rail unions that they are equal parts “essential” to the country and “expendable.”
We call on Congress to act immediately to avert a #RailStrike. Further delay only causes more uncertainty and inflationary pressure when the economy is already straining under the weight of both.
— American Trucking (@TRUCKINGdotORG) November 29, 2022
Brace for Impact
A strike is probable if the four hold-out unions don’t capitulate to the agreement by December 9th. It’s estimated that a railroad strike would cost the economy roughly $2 billion a day.
House Speaker Nancy Pelosi said that a possible rail strike right now would case the “entire nation” to suffer.
“More than 750,000 workers,” said Pelosi, “including many union members, would lose their jobs in just the first two weeks.”
Pelosi also explained that “Millions of families wouldn’t be able to get groceries, medications and other goods, and our economy would be paralyzed as it continues to recover.”
It’s already hard to find some items in grocery stores, including over the counter medications particularly for children. Add in a rail strike to everything going on right now and it could spell significantly more trouble for Americans.
If Congress were to opt against intervention and a strike happened, the idea is that the truckers would be asked to step up and fill the transportation gap, which is way easier said than done.
The American Trucking Association estimates a rail strike would require 500,000 additional trucks and 80,000 more drivers. Not a bad time to have a CDL, I suppose.
Asked if he will allow a vote on legislation to avert the rail strike to happen by the Dec. 9 deadline, Bernie Sanders just told me: “We will have more to say about that later.” He criticized the deal for lack of paid sick leave. “That is outrageous.”
— Manu Raju (@mkraju) November 29, 2022
A Complicated Relationship
Like most political and economic issues, the solution is not so clean-cut. President Biden said in a statement:
“As a proud pro-labor President, I am reluctant to override the ratification procedures and the views of those who voted against the agreement. But in this case – where the economic impact of a shutdown would hurt millions of other working people and families – I believe Congress must use its powers to adopt this deal.”
Congresswoman Pelosi added that “as we consider congressional action, we must recognize that railroads have been selling out to Wall Street to boost their bottom lines, making obscene profits while demanding more and more from railroad workers.”
The unions managed to squeeze the Little Blue Engine that Could for a retroactive quarter wage increase and better medical time off benefits. But, if you give a mouse a cookie, they’ll want paid sick leave.
Unfortunately, by asking Congress to vote to block any rail strike, Biden has given a bright green light to the railroads not to agree to any further concessions in contract talks. The biggest sticking points are the punishing work schedules & lack of sick days the workers face.
— Steven Greenhouse (@greenhousenyt) November 29, 2022
The last time Congress had to make good on the Railway Act was in 1991, and I anticipate they will do the same this year.
Pelosi pointed out that “Congress has both the authority and the responsibility to prevent this outcome and ensure the uninterrupted operation of critical transportation services.”
While the President and his party might face some mild blowback from the labor movement, overall, nobody in this country, or D.C. for that matter, wants a rail strike. It would be considered a win for almost everyone to avert such an economical and supply chain nightmare.
Everyone basically wins in this scenario. The President and his party get to save the country from a crippling strike, Big Rail gets to keep chug chugging along, and the unions get to say they fought the good fight and live to fight another day.
As the great Mick Jagger said, “you can’t always get what you want, but if you try sometimes, you might find you get what you need.” That’s pretty accurate in this case.
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