Rail strike looms and the economic damage it may cause

While two other rail unions reached tentative agreements with the railroad department on new contracts on Tuesday, the two most important unions — which represent the engineers and conductors who make up the two-person crew on each train — are still at odds in negotiations. If they don’t resolve their differences, the first national rail strike in 30 years could begin as early as Friday.

Engineers and conductors’ unions account for nearly half of the more than 100,000 union workers on the nation’s major freight railroads. Without them in action, these trains would not run, and many passenger trains and Amtrak that operate on freight rail lines would not. In fact, Amtrak is already suspended some of its ways.

If the two parties do not reach an agreement by the end of Tuesday, the two union chiefs and railroad negotiating team negotiators are scheduled to meet with Labor Secretary Martin Walsh in Washington early Wednesday, according to a person familiar with the plans.

“The parties continue to negotiate, and last night Secretary Walsh was once again engaged in pushing the parties to reach a resolution that would prevent any shutdown of our rail system,” a Labor Department spokesperson said on Tuesday. Talks reportedly continued into the late afternoon on Tuesday.

Railroads operate under a unique labor law that allows the federal government to step in to keep workers in the job, rather than allowing freedom to strike or shutdown workers by management.

president Joe Biden prevents strike Through executive action in July, which delayed the possibility of a strike by 60 days. He also appointed a committee known as the Presidential Emergency Council, which came up with recommendations on a deal that most unions accepted.

But not the engineers and conductors, who say the scheduling rules that keep them “on call” nearly every day they don’t work, as well as a staff shortage, make their working lives unbearable. These rules are not addressed by the emergency board. Without a change in these rules, engineers and conductors say they will be on strike. The 60-day cooling off period is set to expire at 12:01 a.m. ET on Friday, with the threat of a strike looming.

Will Congress act to stop the strike?

Unless the parties reach an agreement, only Congressional action can prevent or end the strike. Richard Durbin, the second-highest member of the Senate Democratic leadership, told CNN that Democrats are not enthusiastic about taking action before the strike ban deadline.

“I don’t think we’re likely to get involved,” Durbin said. Avoiding a strike “depends on the escalation of the parties in the negotiations to the list.”

The railroad department and several business groups, including the American Chamber of Commerce and the National Retail Federation, are calling on Congress to act to prevent the strike.

Extensive economic impact

The blow would be a fatal blow to US economythat you’re still struggling with supply chain problems. Almost 30% of the country’s shipments are transported by rail. Among the problems can be:
  • Gasoline: Without freight rail, oil refineries will have trouble producing their current quantities of gasoline, which could lead to higher gas prices, ending a three-month streak of Falling prices at the pump.
  • Food: can disrupt Food supply for the nationPreventing recently harvested crops from moving to food factories and disrupting the supply of fertilizers for upcoming plantings.
  • Consumer Goods: According to the National Retail Federation, any rail strike can have long-term negative effects on the import of goods for the holiday shopping season, causing shortages and higher prices.
  • Cars and trucks: cars prices It has already set record prices this year due to the limited supply of new vehicles due to shortages of computer chips and other parts. A rail strike would further choke supplies and interrupt the delivery of auto parts to auto assembly plants, which could lead to temporary shutdowns of some factories. It will also disrupt the flow of completed new cars and trucks, 75% of which move by rail.

The full economic impact will not be immediate, said Patrick Anderson of Anderson Economics Group, which makes estimates of the economic impact of business interruptions, even though it will likely cost the economy tens of millions of dollars a day initially.

“The costs will increase geometrically the longer the strike,” he said. “After a week, you will notice real damage to the American economy.”

He said an estimate of $2 billion a day in economic damage from the railroad trade group was a “big exaggeration” but that significant costs would spread across the economy. “If we come to a one-week strike, we are in uncharted territory,” he added.

Not related to payment

The emergency board recommended an immediate 14% increase for union members, including late payment of some of that increase through 2020. Workers will also receive a 24% increase over the five-year life of the contract, and annual cash bonuses of $1,000.

But engineers and delivery workers say the strike did not exceed wages; Working and scheduling conditions drive its members to quit their jobs, leaving railroads with staff shortages making conditions for remaining workers unbearable. The unions that accepted the deal had no scheduling problems that engineers and conductors face.

Railroads say their employees average $122,000 a year in compensation, including wages and benefits. But the railways themselves were also very profitable, with many – Union Pacific (UNP)And the Southern Norfolk (National Security Council) And the Berkshire Hathaway (puddles) Burlington Northern Santa Fe – Record profit.

Republicans want action from Congress

Some Republicans in Congress say they are preparing legislation to impose a contract on the unions of engineers and conductors to force them to stay in the job.

“A rail strike would be disastrous for the American transportation system and our supply chain already,” said Senator Richard Burr, a Republican from North Carolina and one of two senators planning to introduce the legislation. (The other is Republican Roger Wicker of Mississippi.)

Burr said the PEB’s recommendations, which form the basis of the contract his legislation would enforce, “are a fair and appropriate solution to a years-long negotiation process, but labor unions continue to hold the entire nation’s rail system hostage as they demand more.”

America is already feeling the consequences of a looming nationwide rail strike

Through their trade group, the American Railroad Association, railroad companies say demands by engineer and conductor unions to change scheduling rules “must be dealt with locally” rather than through national bargaining. He noted that the unions’ request to “make the change as part of the national contract” had been “expressly rejected” by the PEB.

For their part, the leadership of the unions of engineers and conductors said that its members will not endorse any deal that does not include changes in labor rules. Both unions say they have already cut back on what they are asking for in an effort to seal the deal.

Unions also say a strike is the best way to get a deal that wins their members’ support and improves the quality of rail service nationwide. They maintain that the railroads are dependent on Congressional intervention, which for the time being would eliminate the hiring of additional staff that union leadership says is necessary.

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

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