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US Railway Strike Once Again Leaves Economy Hanging in the Balance

Neil lives in Canada and writes about society and politics.
Published: September 12, 2022
U.S. railway worker unions may walk off the job as early as Friday, Sept. 16 amid a multi-year labor dispute.
Railroad tracks pass farmland amid ongoing drought on Aug. 26, 2022 near Exeter, California. A multi-year dispute between railway unions and operators may come to a head, resulting in a strike that could cripple the U.S. economy starting as early as Friday, Sept. 16. (Image: Mario Tama/Getty Images)

A long festering dispute between United States railway workers and their employers once again hangs in the balance as more than 140,000 employees could walk off the job on Sept. 16 if no deal is reached and Congress does not intervene.

Congressional intervention is a political knot, however. Although the Biden Administration previously intervened in the strike, which cast an overhead shadow in July, imposing a 90-day cooling off period, as the November Midterm Elections now loom large, Democrats risk alienating the crucial union-worker demographic. 

The demands are significant, as Vice President Kamala Harris told the public on Sept. 11 that two extra Democrat Senate seets are required to dispose of the filibuster rule temporarily to pass abortion codification and election laws, a wish she attributed to President Biden.

Sept. 12 reporting by Bloomberg states that the Administration is already flexing its soft power, pressuring both unions and operators to stamp an agreement before Friday.

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Citing comments from an unnamed “White House official,” Bloomberg minced no words, “Underscoring how high the stakes are for Biden…the administration has made clear to the negotiators that a shutdown of the freight-rail system is an unacceptable outcome for the economy.”

Bloomberg added, while pointing out a railway strike would cost the economy $2 billion per day, “A strike also would carry significant political risk for Biden and his fellow Democrats, whose efforts to hang on to their House and Senate majorities in the Nov. 8 elections have been boosted by a string of legislative victories and improving economic news.”

“Supply-chain disruptions less than two months before voters go to the polls could hurt Democrats and put Biden — who has pledged to be the most pro-union president in history — in a bind.”

The previously-mandated cooling off period ends at 12:00 a.m. on Sept. 16, and a strike may come just that early.

A potential deal that would include a more-than 24 percent pay increase for workers was hammered out over the weekend.

In a Sept. 11 article regarding how three smaller unions had come to a tentative agreement with operators, transport industry publication Freightwaves elucidated some details of the revised contract-to-be while quoting a statement from one of the unions. 

“The tentative agreements … include a 24% wage increase during the five-year period from 2020 to 2024 — with a 14.1% wage increase effective immediately — and five annual $1,000 lump sum payments. Portions of the wage increases and lump sum payments are retroactive and will be paid out promptly upon ratification of the agreements by the unions’ membership,” it read.

The trio represent approximately 86,000 of the 140,000 workers at large.

However, according to Sept. 12 reporting by Axios, the two largest unions, The Brotherhood of Locomotive Engineers and Trainmen and The SMART Transportation Division, are not in favor of the penciled deal, because at the core of the dispute is less money and more long hours and punitive scheduling systems they say have been installed by operators.

In a Press Release, SMART President Jeremy Ferguson accused operators of placing embargos on new shipments as early as Sept. 12 as tactical leverage against the unions, who they are unable to lockout until Friday.

Ferguson stated, “Our Unions remain at the bargaining table and have given the rail carriers a proposal that we would be willing to submit to our members for ratification, but it is the rail carriers that refuse to reach an acceptable agreement.” 

The President added, “In fact, it was abundantly clear from our negotiations over the past few days that the railroads show no intentions of reaching an agreement with our Unions, but they cannot legally lock out our members until the end of the cooling-off period.” 

“Instead, they are locking out their customers beginning on Monday and further harming the supply chain in an effort to provoke congressional action.”

Further comments made clear that contract negotiations were effectively at a standstill, “The railroads are using shippers, consumers, and the supply chain of our nation as pawns in an effort to get our Unions to cave into their contract demands knowing that our members would never accept them.” 

“Our Unions will not cave into these scare tactics, and Congress must not cave into what can only be described as corporate terrorism,” Ferguson added.

The twin union giants represent approximately half of all workers, while the remaining half are represented by a conglomerate of 10 unions, who have expressed their support for the proposed deal.

A CNN Business wire article dated Sept. 12 notes that the two hold out unions are composed of the mission-critical engineer and conductor class of railway staff, meaning if they vote to walk out, there won’t be any rail service regardless of what the other unions choose.

Nonetheless, rank-and-file workers across all unions will ultimately have to vote on whether to accept the deal.

According to a second Axios article on the topic, House Majority Leader Steny Hoyer (D-MD) directly stated that if no deal is reached, Congress will pass legislation to deter a strike from derailing the economy.

However, in Sept. 12 reporting, Politico quoted a “a person familiar with the conversations, but not authorized to speak to the press” as opining that the calamity would, once again, blow over.

“There is this narrative being developed that a work stoppage is inevitable and unions are chomping at the bit,” the source stated. “My view is that a strike is unlikely, and that the likeliest scenarios are, one, that they reach an 11th hour or 11th hour and 59 minute deal. The second likeliest scenario is they extend the cooling off period so that they can have more time to cross all the t’s and dot all the i’s.”