Freight railroads have been around since the nineteenth century, but they are essential to running a 21st-century economy.
Businesses across the country are concerned about the possibility of a strike by unions representing more than 90,000 workers at the nation’s freight railroads. The unions are planning a strike on September 16, which could shut down 40% of the country’s freight.
It’s the last thing the US economy needs as it works to recover from several years of supply chain problems. A prolonged strike could result in empty store shelves, temporary factory closures due to a lack of parts, and higher prices due to the limited availability of various consumer goods.
“We’re hearing more and more that shippers and railroads are concerned,” said John Drake, the US Chamber of Commerce’s vice president for transportation, infrastructure, and supply chain policy. The chamber is urging the two parties to reach an agreement to avoid the first national rail strike in 30 years.
Unions and the National Railway Labor Conference, which represents management at the bargaining table, met with federal mediators and US Labor Secretary Martin Walsh on Wednesday to see if they could reach an agreement. The unions claimed there had been no progress.
Because freight railroads have generally thrived during the pandemic, the main point of contention is not pay, but rather the rules governing worker scheduling. Many of the engineers and conductors who make up the two-person crews on each train have to be “on call” to report to work seven days a week, preventing them from making their own plans, depriving them of time with their families and creating a high turnover rate.
Because railroad workers are subject to a different labor law than those that govern labor relations at most businesses, Congress may be able to intervene to prevent or quickly end a strike. However, that would necessitate a level of bipartisanship that is uncommon in Washington just weeks before midterm elections.
President Joe Biden averted a strike two months ago by imposing a cooling-off period during which a panel he appointed, known as a Presidential Emergency Board (PEB), examined the disputed issues in the negotiations and recommended a settlement.
That 60-day cooling-off period is set to expire on September 16 at 12:01 a.m. ET, and Biden does not have the authority to prevent a strike at that time. Only Congress has the power to prevent a strike, either by imposing a deal on the two sides or by extending the current cooling-off period.
The PEB proposed multiple annual raises beginning in July 2020, when the previous contract was set to expire.
Workers would receive an immediate 14% raise, as well as additional back pay for hours worked since 2020. More raises would follow, resulting in a 24% pay increase over the five-year term of the contract, which would run from 2020 to 2024, as well as $1,000 annual cash bonuses.
The PEB’s wage recommendations are slightly lower than what the unions requested, but slightly higher than what management had previously offered.
However, it was lucrative enough that five of the smaller unions representing more than 21,000 railroad workers agreed to tentative labor deals based on the panel’s recommendations, though they must still be ratified by their rank-and-file members before they take effect. And, even though they were asking for more, the PEB’s wage recommendations would have probably been enough to win approval from the other unions.
The conductors’ union and the other six strike-threatening unions, including the one representing engineers, are dissatisfied with the work rule recommendations and how the “on call” requirement will affect the quality of their members’ lives, denying them any free time with their families even when they are not working. The unions are urging their congressional allies not to act, claiming that a strike is the only way to reach an agreement that will improve what they call intolerable work rules that are driving employees to quit the business, causing staff shortages and well-documented service problems in freight rail service.