Massive rail strike next week could deal another blow to the US economy

Massive rail strike next week could deal another blow to the US economy
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New York
CNN Business

Freight railroads have been around since the 19th century, but you can’t run a 21st century economy without them.

the one that is coming possibility of strike by unions representing more than 90,000 workers on the nation’s freight railroads has businesses across the country concerned. The unions are about to go on strike on September 16, a move that could paralyze 40% of the country’s freight transport.

It is the last thing the US economy needs as it struggles to overcome several years of supply chain issues. A prolonged strike could mean empty store shelves, temporary closures at factories that don’t have the parts they need to operate, and higher prices due to limited availability of various consumer goods.

“We’re hearing more and more that shippers and railroads are getting anxious,” said John Drake, vice president for transportation, infrastructure and supply chain policy at the U.S. Chamber of Commerce. The chamber is calling on both parties to reach an agreement that would prevent the first national rail strike in 30 years.

The unions and the National Railroad Labor Conference, which represents management at the bargaining table, met Wednesday with federal mediators and US Labor Secretary Martin Walsh to see if they could come close to a deal. The unions said there was no progress.

Freight railroads have generally prospered during the pandemic, so a key dispute is not about pay, but rather the rules that control the scheduling of workers. Many of the train drivers and engineers who make up the two-person crews on each train have to be “on call” to report for work seven days a week, preventing them from making their own plans, depriving them of time with their families and creates a high turnover rate.

Because railroad workers are subject to a different labor law than the one that controls labor relations at most companies, Congress may act to prevent or quickly stop a strike. But that would require a level of bipartisanship that is rare in Washington just weeks before midterm elections.

President Joe Biden prevented a strike two months ago by imposing a period of reflection during which a panel he appointed, known as the Presidential Emergency Board (PEB), analyzed the issues in dispute in the negotiations and issued a recommended agreement.

That 60-day cooling-off period will expire at 12:01 a.m. ET on September 1. 16, and Biden doesn’t have the power to prevent a strike at that point. Only Congress can act to prevent a work stoppage, either by imposing a deal on the two sides or by extending the current cooling-off period.

The PEB recommended multiple annual increases until July 2020, when the previous contract expired.

They would give workers an immediate 14% raise, as well as additional back pay for hours they worked since 2020. There will be more raises in the future, resulting in a 24% wage increase over the course of five years of the contract that runs from 2020 to 2024, as well as annual cash bonuses of $1,000.

The PEB’s salary recommendations are slightly less than what the unions requested and slightly more than management had previously offered.

But it was lucrative enough that five of the smaller unions representing more than 21,000 rail workers agreed to tentative labor agreements based on the panel’s recommendations, though they still need to be ratified by their rank-and-file members to take effect. . And the PEB salary recommendations would probably have been enough to win the approval of the other unions, even though they asked for more.

“We are not going to sit here and discuss [wages] or health care. We are beyond that,” said Jeremy Ferguson, president of the union that represents the drivers, one of two workers on the freight trains along with the engineers.

Drivers’ union and six other unions poised to strike, including the one representing engineers, unhappy with work rule recommendations, and how “call” requirement will affect quality of life of its members, denying them any free work. time with their families even when they are not working.

The unions are urging allies in Congress not to act, arguing that a strike is the only way to reach a deal that could improve what they say are intolerable work rules that drive employees out of business, causing shortages. personnel and well-documented problems in cargo service. rail service.

“The fact is that they [the railroads] they are counting on Congress to act,” said Dennis Pierce, president of the Brotherhood of Locomotive Engineers and Trainmen. “We have left them [the union’s allies in Congress] we know we need them to stay out of it.”

“This is an opportunity for Democrats to stand up for something that they say they support, the working class and workers,” Ferguson said.

If Congress acts, it would represent 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 in supply chains, prices and the economy before the crucial midterm elections.

When 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 settlement to avoid a shutdown he hopes 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.

The official said the White House “stands ready to support the parties as they work toward an agreement or a voluntary extension of the reflection period.”

“We take no position on what the elements of an agreement should be,” the official added. “We trust that the parties will do everything possible to negotiate in good faith towards a mutually acceptable solution, and we urge both parties to do so expeditiously.”

Democrats in Congress could impose a contract more to the unions’ liking than the one recommended by the presidential panel. But that could have trouble getting the necessary Republican support through. Republicans could potentially benefit if there were a prolonged rail strike causing problems in the economy just before the election, especially if Democrats could be blamed.

Even some companies that would like to see the dispute resolved without a strike are nervous about going to Congress.

“Frankly, it’s not a good sign if it finally makes it to Congress,” said a business official closely monitoring the possibility of a strike, who said on the condition that his name not be used.

“You don’t know what you’re going to find. You could have members who could hold up legislation to require one thing or the other…Once Congress gets involved, it’s a disaster.”

This executive believes that Congress will break the can, extending the period of reflection, perhaps beyond election day, instead of imposing a contract. But that is still not a solution.

“Here’s the problem, it’s been 30 days since the [presidential panel’s] recommendations Only five of the 12 rail unions have signed the recommendations,” he said.

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

“It is in the best interest of all stakeholders and the public that railroads and railroad labor organizations quickly reach agreements that provide wage increases to employees and prevent interruptions in rail service,” the National Conference of Railroad Workers said. “Now is the time to use the PEB recommendation as the basis for an early and voluntary agreement.”

The railroad trade group released an estimate Thursday that halting freight rail service would cost the US economy $2 billion a day. It did not specifically call for congressional action, encouraging the parties to resolve the dispute through negotiations, although its statement said that “ultimately, Congress has the power to intercede and prevent a closure.”

The strike threat comes as several railroads, including the Union Pacific

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and Berkshire Hathaway

‘s Burlington Northern Santa Fe have reported record profits.

Unions argue that companies are making profits at the expense of their employees, creating conditions that are driving workers to quit. Employment at the country’s main railways has shrunk by more than 30,000, or about 20% of the workforce, since the last contract was struck in 2017.

Union leaders say their members are now at a critical point and are eager to strike for change.

“This is not a personal choice of union presidents,” Engineers Union President Pierce said. “Our members have made it clear and loud that this is not an agreement that members would ratify.”

– CNN’s Betsy Klein contributed to this report

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