Railroad strike could cause massive hit to US economy

Published: Nov. 29, 2022 at 9:18 PM EST
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DELTA TOWNSHIP, Mich. (WILX) - The clock is ticking to reach a deal that would avert a rail strike which could have crippling effects on the nation’s economy.

Related: Biden calls on Congress to head off potential rail strike

The President sat down Tuesday with congressional leaders for the first time since the midterm elections. In brief remarks, he said the rail workers’ strike and the economy would be topics of discussion during the meeting and he said that he is “confident” a rail workers’ strike is avoidable.

The Unions said railroad workers will strike on Dec. 9 if management and unions have not come up with a new agreement, or if Congress fails to pass legislation blocking the strike.

Railroad workers in the Midwest are not happy about their work-life balance and they want more than the proposed agreement.

“We had a member that was actually disciplined, he was in a car wreck coming to work. He wasn’t going to work because he could be hurt,” said Jeff Kurtz, a retired railroad engineer.

Kurtz worked in the Midwest for 40 years. Now he’s advocating to give workers in the rail industry a life outside work. “They can deny you that time off, you have to apply for that time off, so the one personal day that they gave up, they don’t have to let you take that, if you’re not federal rest they don’t have to give you that.”

Dr. Peter Berg, the Director of Human Resources and Labor relations at Michigan State University, said the expectations companies have for employees are not working.

“Until they get an agreement, that it is not sustainable,” Berg said. “It’s not something that will work in the long term.”

Berg said these issues continue to come up dating back to November 2019, when the rail industry started negotiations.

Scheduling is another issue the industry is struggling with, but he said there are solutions. “I think it contributes to the approach companies are now taking to utilize their remaining workers, so they can hire lots more workers and spread their work out, but that’s more costly.”

Berg said that being more efficient in the freight return, in terms of productivity, could help the companies become more cost-effective.

If an agreement between the two sides is not reached, it could hurt the economy.

“Yeah, that is a big concern, and back up in the ports. More restrictions and raising prices,” Berg said. “The ability of rail to move in bulk and quantity is greater than that a couple of semi-trailers.”

Kurtz said the government has a chance to correct these issues, “Make sure that people got their proper rest and that they can have a life.”

Kurtz also said that there are actions that can be taken by the federal government in this situation to avoid an ultimatum of letting the two parties either come to an agreement or start a strike.

“They can throw in the 15 personal days or they can do like the 2008 Railway Safety Act tells people, that this is actually legislation that the Secretary of Transportation looks over all scheduling and he makes the determination,” Kurtz said.

The Association of American Railroads released a statement Tuesday addressing the issue:

“Today, the Biden Administration called for Congress to ready legislation to implement the tentative agreements and avert a $2 billion per day rail work stoppage that could begin as early as 12:01 AM ET on December 9th. Time is limited to bring this round of national bargaining to a conclusion before the status quo expires.

“No one benefits from a rail work stoppage – not our customers, not rail employees and not the American economy,” said AAR President and CEO Ian Jefferies. “Now is the appropriate time for Congress to pass legislation to implement the agreements already ratified by eight of the twelve unions. A clear pattern of ratified agreements has been established and Congressional action to prevent a work stoppage in this manner is appropriate. These agreements will ultimately boost average employee compensation and benefits to more than $160,000.”

Eight of the 12 labor unions plus a portion of SMART-TD’s membership have now fully agreed to contracts forged in part by the leadership of the Biden Administration. These deals provide employees with a 24 percent wage increase over the five-year period from 2020 to 2024 and preserve employees’ best-in-class healthcare coverage. Employees represented by unions who have already ratified are already benefitting from an 14.1% wage and immediate payouts that will average $16,000 across all unionized railroaders.”

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