President Joe Biden issued an executive order to help resolve a major labor dispute that might have resulted in more than 100,000 rail workers going on strike.
Biden approved the formation of an emergency board on Friday to help investigate a dispute between railroads and the unions representing rail workers after contract negotiations came up short. The negotiations had been ongoing for more than two years, and thousands of rail workers had voted in internal union elections to go on strike if no action were taken by the Monday deadline.
Biden’s decision to intervene prevents any strike or lockout in the next 60 days under federal law, meaning that he is taking the gun out of labor’s hands in order to prevent a freight slowdown.
“I have been notified by the National Mediation Board that in its judgment these disputes threaten substantially to interrupt interstate commerce to a degree that would deprive a section of the country of essential transportation service,” Biden said in the order.
The board will spend 30 days investigating the disputes and negotiation process and will provide the president with a report within that time frame. Under the order, there is also not allowed to be any strike action for the 30 days following Biden’s receipt of the board’s report.
A mass strike by rail workers would have further upended the country’s supply chains, which are already frayed, and put increased inflationary pressure on the economy, which is already reeling from the hottest inflation in four decades.
Consumer prices increased at a blistering 9.1% annual pace for the month of June, and inflation as measured by producer wholesale prices also ticked up to 11.3% for the year ending in June.
The order came under pressure from business groups, which urged the president to intervene given just how detrimental strikes would be to the freight rail system. The last time there was a rail strike, three decades ago, it lasted two days and cost some $50 million each day.
The failed negotiations put Biden, who has sought to champion labor unions, in a tough position. Support from unions is crucial for Biden to hold on to support in blue-collar states such as Pennsylvania, Ohio, and Michigan, but inflation has been even more of a pressing problem nationwide.
By signing the order, as was expected, Biden has blocked the unions from taking collective action to demand better pay but has avoided what could have been a disaster for U.S. supply chains at a time when they are most needed to be functioning properly.
“Keeping supply chains running means keeping America’s railways running. In making the decision to create the Presidential Emergency Board, the President has considered input from relevant stakeholders,” the White House said in a statement after the order was announced.
“The President’s goal is to make sure America’s freight rail system continues to run without disruption, delivering the items that our families, communities, farms and businesses rely on,” it added.
