Last Minute Agreement Averts Railway Shutdown
A railway strike that would have been crippling to the U.S. supply chains has been averted. On Thursday morning President Biden announced that the two sides had reached a tentative agreement, preventing work stoppages that could have gone into effect as soon as Friday. Next, union members will vote on the agreement after an agreed upon post-ratification cooling-off period to ensure railways keep running.
A railway strike, particularly when layered on top of existing challenges facing the supply chain and economy, would be disastrous.
- The unions involved in the negotiations represented 115,000 workers. With about 30% of the nation’s freight moving by rail, a strike would have halted shipments of food and fuel and cost the country approximately $2 billion per day.
- A strike’s effects would also extend to passenger traffic as well. Although its workers were not part of the dispute, Amtrak and many commuter rail operators use rail lines owned by the freight railroads. Amtrak had already cancelled several of its long-distance trains this week and others were set to stop today.
Railway workers operate under different labor laws than other workers. These laws limit their ability to strike and allow more government involvement in labor negotiations. A Presidential Emergency Board (PEB) established by the White House in July presented several recommendations but did not include all of the unions’ most pressing demands, including changes to railway attendance policies.
Representatives from the unions and railways spent 20 hours on Wednesday at the Department of Labor hammering out the deal. The agreement follows many of the recommendations proscribed by the PEB.
- Retroactive to 2020, the five-year deal includes 24% raises and $5,000 in bonuses, as suggested by the PEB.
- Additionally, railroads agreed to ease attendance policies. Workers will now be able to take unpaid days off for doctor’s visits without being penalized under existing attendance systems. They also receive one additional paid day off per year.
“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned,” said President Biden in a statement. “The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.”