Strikes costing billions of dollars that would plunge supply chains further into chaos may be just days away if rail carriers and unions can’t reach an agreement.
The major rail carriers and associated unions have until next Friday, Sept. 16, to reach an agreement on contract negotiations before a cooling-off period lapses and workers are permitted to strike. Should that happen, thousands of trains and the goods they are carrying could be frozen in place, resulting in severe economic consequences.
The nationwide rail service disruption brought on by a strike would “dramatically impact economic output” and could cost upward of $2 billion per day, according to a report by the Association of American Railroads.
In July, given the severity of the situation, the White House approved the formation of an emergency board to help alleviate 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, with thousands of rail workers voting in internal union elections to go on strike.
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President Joe Biden’s decision to intervene with a Presidential Emergency Board prevented any strike or lockout from occurring for 60 days under federal law, but as that window closes, just five of the 12 unions have arrived at voluntary agreements with the railroads.
On Wednesday, Labor Secretary Marty Walsh sat in on a meeting between the National Mediation Board, rail carriers, and several unions in an effort to avoid what would be one of the biggest strikes in recent history.
The Presidential Emergency Board recommended a deal in which rail workers would get an immediate 14.1% wage increase and a 24% compounded wage increase through 2024. Should the deal be ratified, rail employees would receive average pay of about $110,000 annually by the end of the agreement. The wage increases would be the largest in four decades, according to CNBC.
Dan Bowling, a senior lecturing fellow at Duke University School of Law who teaches labor and employment courses, noted that rail strikes differ from other strikes because labor relations are governed by the Railway Labor Act of 1926.
That law means that Congress can intervene in the event of an airline or railway strike and could force the Presidential Emergency Board’s recommendations or pause the strike and appoint arbitrators to draw up a new contract.
Biden has styled himself as a pro-labor president, so the optics of forcing a contract on the rail unions could be detrimental to him among blue-collar workers. On the other hand, a shutdown of the country’s rail lines resulting in delays, higher prices, and supply chain woes could also prove deleterious for him and Democrats heading into the midterm elections.
“If the country’s supply chain gets shut down any worse or gets shut down, that’s going to look very bad for the president and for the party because it will make the economy a lot worse,” Bowling said.
Bowling said he expects that Congress and the administration will intervene to clamp down on a possible railway strike given the scale of the disruption it would afflict on the economy and Democrats’ desire to avoid further supply chain problems and inflationary pressures.
Still, it has been three decades since Congress intervened to stop a rail strike. The Brotherhood of Locomotive Engineers and Trainmen and the International Association of Sheet Metal, Air, Rail and Transportation Workers said the railroads “all but hide behind Congress” in pushing back on the union demands.
“While there are no guarantees for either side as to what Congress might do if they are involved, there is no doubt that the rail carriers expect Congress to intervene to save them from dealing fairly with their employees if there is a job action,” they said.
A White House official told the Washington Examiner that, given the massive supply chain disruptions stemming from the pandemic and its subsequent fallout, now is not the time for increased uncertainty or disruption.
“Now is the time for the parties to resolve their differences, before the nation’s economy begins responding to even the prospect of a nationwide rail stoppage,” the official said, emphasizing that the president supports the collective bargaining process and stands ready to support the parties involved work toward an agreement or a voluntary extension of the cooling-off period.
Rail workers have complained of understaffing, especially given that during the past six years alone, some 45,000 employees have been laid off, according to the Hill. The result is that many current workers feel as though they are overworked and don’t get enough time off.
“I would suspect that most railroad workers would love to strike, would love to get back at their employers after years of abuse while they watched the industry make record profits,” said Ron Kaminkow, a Railroad Workers United organizer.
The clock is ticking in the lead-up to next Friday’s deadline, which comes at a time of increased interest and support for unionization efforts across the board.
In March, the National Labor Relations Board announced that, during the first half of fiscal year 2022, union representation petitions filed with the NLRB rose 57%, up to 1,174 from 748, during that same time last year. Unfair labor practice charges have also ballooned 14% during that same period.
Public support for unions has also been growing. A new Gallup poll found that more than 70% now say they approve of unions, up from just 48% in 2009. The share of approval is now the highest it has been since the 1960s.
Just this week, the MLB Players Association announced that it was seeking recognition from the MLB to become the collective bargaining representative for minor league players. It said a “significant majority” of minor league players support the effort.
Additionally, over the past year, more than 300 Starbucks locations have petitioned the labor board for union elections after a store in New York became the first to vote for unionization in December. More than 200 of those stores have since voted in favor of unionizing.
Bowling credits the resurgence in union interest to several factors, a major one being public attention to union efforts. When an Amazon facility in Bessemer, Alabama, attempted to unionize earlier this year, it received national media coverage and outsize attention from politicians on both sides of the aisle, ranging from Sen. Bernie Sanders (I-VT) to Sen. Marco Rubio (R-FL).
“The union movement … certainly is getting more attention than it has in my career, or at least in the last 20 years,” Bowling said.
Another even bigger union showdown is set to take place next year when UPS and the Teamsters Union begin contract negotiations in the spring. The contract is set to expire next July, and many anticipate a strike.
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“The question is how long it will be,” Todd Vachon, professor of labor relations at Rutgers, told CNN. “The union’s president ran and won on taking a more militant approach. Even if they’re very close [to a deal], the rank and file will be hungry to take on the company.”
Some 350,000 Teamsters are employed by the postal carrier, and the scale of those employees striking would wreak havoc on postal supply chains. Should they strike, it would be the single largest such strike against a lone private company in U.S. history.
