Railroad strike, and the economic damage it causes, is drawing near

New York
CNN Business

a freight rail strikeAnd the economic turmoil it could cause is getting closer and closer to reality.

While two more rail unions on Tuesday made tentative agreements with rail management on new contracts, the two most important unions – representing the engineers and conductors who make up the two-person crew on each train – remain at loggerheads in negotiations. If they do not settle their differences, the first national rail strike in 30 years could begin on Friday.

Those engineer and conductor unions represent nearly half of the more than 100,000 unionized workers on the nation’s major freight railroads. Without them on the job those trains would not run, nor would the many commuter and Amtrak trains that run on goods rail lines. really, Amtrak is already suspended Some of its routes

If the two sides do not reach an agreement by the end of Tuesday, the heads of both unions and negotiators from the railroads’ bargaining team are scheduled to meet with Labor Secretary Martin Walsh in Washington early Wednesday. plans.

“The parties continue to negotiate, and last night Secretary Walsh again pushed the parties to reach a resolution that prevents any shutdowns of our rail system,” a Labor Department spokesman said Tuesday. It is being told that the talks continued till late Tuesday evening.

Railroads operate under a unique labor law that allows the federal government to intervene to hire workers, rather than freely allowing a strike or lockout of workers by management.

President Joe Biden Blocks a Strike Through executive action in July, which delayed the prospect of a strike for 60 days. He also appointed a panel, known as the Presidential Emergency Board, to come up with recommendations for a deal that has been accepted by most unions.

But not engineers and conductors, who say the scheduling rules that keep them “on call” virtually every day they are not at work, as well as staff shortages, make their work unbearable. Those rules were not addressed by the emergency board. Without those rules changes, engineers and conductors say they will be on strike. The 60-day cooling-off period is set to end at 12:01 pm on Friday, amid threats of a strike.

Until the two sides reach an agreement, only the action of Congress can stop or end the strike. Richard Durbin, the second highest-ranking member of the Democrat leadership in the Senate, told CNN that Democrats are not eager to take action before the deadline to stop the strike.

“I don’t think it’s likely that we will intervene,” Durbin said. Avoiding a strike “depends on the parties in the negotiation who step up to the plate.”

Railroad management and several business groups, including the US Chamber of Commerce and the National Retail Federation, are calling on Congress to take action to stop the strike.

strike would be a serious blow to them US economywho is still struggling supply chain problem, About 30% of the country’s freight is transported by rail. Among the problems may be:

  • Gasoline: Without freight railroads, oil refineries would have trouble producing their current amounts of gasoline, which could send gas prices higher, ending a string of three months. falling prices at the pump,
  • Eating: It Can Disrupt nation’s food supplyPreventing recently harvested crops from going to the food processor and disrupting the supply of fertilizers needed for subsequent plantings.
  • Consumer Goods: According to the National Retail Federation, any rail strike could have a long-term negative impact on imports of goods for the holiday shopping season, leading to shortages and higher prices.
  • Cars and Trucks: car prices A limited supply of new vehicles due to a lack of computer chips and other parts has already hit record prices this year. The rail strike will disrupt supplies, leading to the suspension of auto parts deliveries to auto assembly plants, which may lead to temporary closures at some plants. It will also disrupt the flow of full new cars and trucks, 75% of which run by rail.

The full economic impact would not be immediate, said Patrick Anderson of the Anderson Economic Group, which estimates the economic impact for the work stoppage, although it would initially cost the economy tens of millions of dollars a day.

“The cost will increase geometrically, the longer the strike,” he said. “After a week, you will see the real damage in the US economy.”

He added that the railroad’s estimate of $2 billion a day in economic damage from its business group is a “gross exaggeration”, but that the significant cost would spread to the entire economy. “If we reach a week-long strike, we are in uncharted territory,” he said.

The Emergency Board recommended an immediate 14% increase for union members, including a return to backpay 2020 for some of them. Workers will also receive a 24% increase over the five-year life of the contract, and a $1,000 annual cash bonus.

But engineers and conductors say the strike is not about wages; The working conditions and time-table are prompting their members to quit their jobs, leading to shortage of staff in the Railways making the situation unbearable for the rest of the workers. Unions that have accepted the deal do not have the scheduling issues that engineers and conductors face.

Railroads says that the average compensation for their employees comes to $122,000 per year, which includes both salary and benefits. But the railroads themselves have also been very profitable, many of them Union Pacific

Norfolk Southern

and Berkshire Hathaway

Burlington Northern Santa Fe – Reporting record earnings.

Some Republicans in Congress say they are drafting legislation that would impose a contract on engineers and conductor unions to force them to stay at work.

“A rail worker strike would be devastating to America’s transportation system and our already stressed supply chain,” said Sen. Richard Burr, a North Carolina Republican and one of two senators who plan to introduce legislation. (The other is Republican Roger Wicker of Mississippi.)

Burr said the PEB’s recommendations, which form the basis of their law-enforced contract, “are a fair and reasonable solution to the year-long negotiation process, but labor unions continued to hold the entire nation’s rail system hostage.” because they demand more.”

Through its trade group, the Association of American Railroads, Railroads maintains that engineers and conductor unions’ demands to change scheduling rules “should be dealt with locally” and not through national bargaining. It pointed out that the unions’ demand for the change as part of the national contract had been “categorically rejected” by the PEB.

For their part, the leadership of the engineers and conductor unions said their members would not ratify any deal that did not involve a change in work rules. Both unions say they have already reduced what they are asking for in an effort to complete the deal.

The unions also say that the strike is the best way to get a deal that will win the support of their members and improve the quality of rail service across the country. He argues that the railroads are relying on Congress to step in, which will now end the hiring of additional staff that union leadership says is needed.

– CNN’s Ali Zaslav and Megan Vazquez contributed to this report

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