Congress Vows to Intervene to Avert Rail Strike

U.S. Congressional leaders vowed to take action to avert a looming rail strike that threatens the economy during the nation’s busiest shopping season.

“Tomorrow morning we will have a bill on the floor,” House Speaker Nancy Pelosi said after a meeting at the White House with President Joe Biden and House and Senate leaders from both parties, the New York Times reported. “I don’t like going against the ability of unions to strike, but weighing the equities, we must avoid a strike. Jobs will be lost. Even union jobs will be lost.”

The decision by Congress to intervene comes after President Biden asked lawmakers to adopt a tentative agreement between railroad workers and their employers. A key union, the Brotherhood of Maintenance Way Employees Division, said forcing an agreement to avert a strike “does not address rail industry disease.”

The union, representing about 26,000 workers who build and maintain rail lines and bridges, issued a statement expressing its deep disappointment with Biden, a longtime advocate for organized labor.

“It is not enough to ‘share workers’ concerns,’ ” the union’s statement read, referring to Biden’s announcement Monday that he would ask Congress to act in the matter. “Passing legislation to adopt tentative agreements that exclude paid sick leave for railroad workers will not address service issues.”

“Tentative” Deal Remains Just That

Paid sick leave remains the key sticking point between rail unions and carriers. Currently, rail workers do not receive pay for taking sick days and can be penalized for taking time off. Carriers have maintained that their attendance policies ensure rail lines remain properly staffed to keep the nation’s freight network operating without considerable delays.

Negotiators for the the nation’s 12 rail unions and management of its rail lines, including all seven Class I freight railroads, reached a tentative agreement in September. It would raise wages 14% immediately for rail workers with back pay dating to 2020, boost wages by 24% for the life the new contract running through 2024, provide cash bonuses of $1,000 per year and cap their health-care costs.

But the tentative deal, which Biden called “a win for our economy and the American people,” did not include paid sick time. In order for the agreement to take effect, all 12 unions representing the nation’s 125,000 rail workers must ratify it. But four of the 12 have rejected it. SMART Transportation Division, the rail union representing conductors, was the latest to do so last week by a narrow 50.9% margin.

Potential Impacts as Strike Deadline Approaches

The unions have set a Dec. 9 deadline to reach a deal. Meanwhile, Biden reiterated his plea to Congress on Tuesday morning.

Congress has the authority to keep rail workers from striking via the 1926 Railway Labor Act (RLA), legislation the Federal Railroad Administration calls a “joint work product of rail labor and management.” The RLA aims to avoid the interruption of interstate commerce by providing for prompt resolution of labor disputes while maintaining the right of rail workers to organize and collectively bargain for labor contracts with railroads.

The last U.S. railroad strike took place in 1992, lasting two days before Congress halted it. Economists estimate a protracted rail strike could cost the U.S. economy $2 billion a day. One trade group projected 700,000 U.S. manufacturing jobs would disappear if a rail strike lasted a month, harming an already-slowing U.S. economy encountering high inflation and rising interest rates.

The nation’s freight rail network entails 140,000 route miles, accounting for one-third of shipments to U.S. ports for export and 40% of the nation’s long distance freight volume. A strike during the heart of the holiday gift-giving season would dramatically affect consumers and businesses alike; the National Retail Federation (NRF) estimates a fifth of all U.S. retail sales occur between Thanksgiving and Christmas.

Business Groups Weigh In

Prior to Biden’s request to Congress, the U.S. Chamber of Commerce earlier on Monday asked House and Senate leaders to intervene, noting that the threat of a strike in September had already disrupted timely shipments.

“The uncertainty of rail service during this year’s protracted contract negotiations has created enormous anxiety,” stated a letter sent to congressional leaders by the chamber and signed by about 400 business groups.

That letter occurred a month after 322 trade groups, led by the American Farm Bureau Federation, the American Trucking Association, the National Retail Federation, and the U.S. Chamber of Commerce, sent a similar letter to Biden, urging him to take the action he took Monday.