Threat of rail strike hangs over US
The US could face a nationwide railroad strike before the festive holidays as a union representing freight railroad conductors voted down a labor deal negotiated by the administration of President Joe Biden.
The rail companies and the unions still have two and a half weeks to reach a new deal before a strike could take place on Dec 9. Union leaders said on Monday that they were ready to go back to the bargaining table.
Roughly 30 percent of freight moves by rail in the US. The Association of American Railroads, or AAR, estimates that a nationwide rail shutdown could cost the country $2 billion a day in economic output.
The National Carriers Conference Committee said some businesses could start to be affected by the threat of a strike before the deadline because railroads will start curtailing shipments of perishable cargo like some food items and dangerous chemicals days ahead of the deadline.
There are now four unions with a combined membership of close to 60,000 workers that have voted down the agreement. If no deal is reached by Dec 8, two things could happen as early as the next day: The railroads could lock workers out, or workers could go on strike.
If there is a strike, Congress likely would intervene within hours. The Railway Labor Act allows Congress to take any number of measures to get trains running again — including imposing some version of the contract or extending the status quo, kicking any decision to the next Congress.
Congress could step in to implement a cooling-off period or even force the workers to accept a deal.
Economic impact
“Let’s be clear, if the remaining unions do not accept an agreement, Congress should be prepared to act and avoid a disastrous $2 billion a day hit to our economy,” said AAR President and Chief Executive Ian Jefferies in a statement.
Any disruption to freight rail services would be a blow to the supply chain recovery and the economy. The group projects that a monthlong strike would pull close to $160 billion out of the economy, and lead to a 1 percent decline in GDP.
The Retail Industry Leaders Association said a rail strike “would cause enormous disruption” although retail stores are well stocked for the crucial holiday shopping season. It’s not clear what a strike would mean for packages because FedEx and UPS, which both rely on rail to some degree, haven’t commented in detail.
The White House helped broker the deal in September before the midterm elections. Biden described it as a win for all sides and the US economy. The railroads called it the most generous contract in modern history and noted that upon ratification, workers would see an average payout of $16,000 in back raises and bonuses.
But it didn’t include any paid sick days, a major disappointment to workers after they helped carry the railroads through the pandemic. The unions were able to secure some protections for workers from the strict attendance policies employed by a couple of the railroads. Under the deal, workers can miss work to attend to medical issues without being assessed disciplinary points, but there are limitations, and the time off is unpaid.
But the 28,000-member SMARTTD union, which represents rail conductors, rejected the contract after one of its divisions voted it down — 50.87 percent voted against the deal.