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

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

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

The 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 come closer to a deal. The unions said there was no progress.

Freight railroads have generally thrived during the pandemic, so a key dispute is not pay, but rather the rules governing worker scheduling. Many engineers and conductors 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 creating a high turnover rate.

Hurry up

Because railroad workers are subject to different labor laws than those that govern labor relations at most companies, it is possible that Congress could act to prevent or quickly end a strike. But that would require a level of bipartisanship that is rare in Washington just weeks before the midterm elections.
President Joe Biden prevented a strike two months ago by imposing a cooling-off period during which a panel he appointed, known as the Presidential Emergency Board (PEB), considered contentious issues in the negotiations and issued a settlement recommendation.

That 60-day cooling-off period is due to expire at 12:01 a.m. ET on Sept. 16, and Biden has no power to prevent a strike at that time. Only Congress can act to prevent a work stoppage, either by forcing an agreement on both parties or by extending the current cooling off period.

The PEB recommended several annual increases until July 2020, when the previous contract was due to expire.

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

The PEB’s wage recommendations are slightly lower than what the unions have asked for, and slightly higher than what management had previously proposed.

But it was lucrative enough that five of the smaller unions that represent more than 21,000 railroad workers agreed to tentative working agreements based on the panel’s recommendations, though they still need to be ratified by their rank-and-file members to enter into effect. And the PEB’s wage recommendations would probably have been enough to win the other unions’ approval, even if they demanded more.

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

Anger over work rules

The drivers’ union and six other unions are about to strike, including the one representing engineers, are unhappy with the work rule recommendations and how the “on call” requirement will affect the quality of life of their members, depriving them of any free time with their families, even outside of work.

The unions are urging allies in Congress not to act, arguing that a strike is the only way to reach a deal that can improve what they see as intolerable work rules driving employees out of the company, causing staff shortages and well-documented service issues in freight. rail service.

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

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

Will Congress act?

If Congress acts, it would pose a difficult policy choice for the Biden administration. Biden is as pro-union as any president in history, but he doesn’t want to see problems for supply chains, prices and the economy before the crucial midterm elections.

Asked about the risk of a strike, a White House official did not raise 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 cooling-off period.”

“We take no position on what the elements of a deal should be,” the official added. “We are confident that the parties will do their utmost to negotiate in good faith towards a mutually acceptable solution, and we urge both parties to do so promptly.”

Democrats in Congress could push through a deal more to the liking of unions than what was recommended by the presidential panel. But that could struggle to garner the Republican support needed to pass. Republicans could potentially benefit from an extended railroad strike causing problems in the economy just before the election, especially if it could be blamed on Democrats.

Biden avoids freight rail strike — for now

Even some companies that would like to see the dispute resolved without a strike are reluctant to turn to Congress.

‘Quite frankly, it’s not a good sign if this ultimately goes to Congress,’ said a company official closely monitoring the potential for a strike, who spoke on the condition that his name not be used. .

“You don’t know what you’re going to get. You might have members who might delay legislation to demand one thing or the other…Once Congress gets involved, it’s a mess.”

This executive thinks Congress will kick the rails, extending the cooling off period, perhaps past Election Day, rather than imposing a contract. But that’s still not a solution.

“Here’s the problem, it’s been 30 days since the [presidential panel’s] recommendations. Only five of the 12 railway unions have 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 calling on Congress to act.

“It is in the interest of all stakeholders and the public that the railways and railway labor organizations quickly reach agreements that provide wage increases for employees and prevent disruptions to rail service,” he said. said the National Railroad Labor Conference. “Now is the time to use the PEB recommendation as the basis for a quick and voluntary agreement.”

The railroad’s trade group released an estimate on Thursday that halting freight rail service would cost the U.S. economy $2 billion a day. He did not specifically call for congressional action, encouraging the parties to resolve the dispute through negotiations, although his statement indicated that “ultimately, Congress has the power to intercede and avoid a closing”.

Record profits for the railways

The strike threat comes as several railways, including Union Pacific (UNP), South Norfolk (NSC) and Berkshire Hathaway (BRKA) Burlington Northern Santa Fe posted record profits.

Unions say companies make profits on the backs of their employees, creating conditions that push workers to quit. Employment at the nation’s major railways has fallen 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 breaking point and eager to strike for change.

“It’s not a personal choice of union presidents,” said engineers’ union president Pierce. “Our members have said loud and clear that this is not an agreement that the members will ratify.”

– CNN’s Betsy Klein contributed to this report

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