Dec. 5, 2022
The country’s railroads will continue operating after Congress passed a law, signed by President Joe Biden Friday, Dec. 2, imposing a labor agreement between the nation’s 12 largest railroad unions and rail companies.
The law is the culmination of negotiations between unions representing 115,000 workers and the rail companies that have been ongoing for most of 2022. The Biden administration became involved in negotiations and in September appeared to broker a breakthrough agreement that would have instituted an immediate 14.1 percent wage increase and a 24 percent wage increase by 2024, along with five $1,000 lump sum payments to all employees and additional personal leave. However, many workers wanted further concessions, including paid sick leave, leading the members of four of the 12 unions to vote against the contract. That put the possibility of a strike back on the table if an agreement were not reached by Dec. 9.
At Biden’s urging, Congress intervened by using its authority over interstate commerce to impose the terms of the contract that were previously agreed upon in September. The House actually passed a version of the bill that would have added seven days of paid sick time to the contract, but the Senate voted it down, leaving the prior agreement as the chosen option.
“We commend members of Congress for averting a catastrophic rail strike,” U.S. Chamber President and CEO Suzanne Clark said in a statement. “The legislation passed reflects the deal struck between the major freight railroads and the leadership of the 12 rail unions and ratified by a majority of rail workers. American workers, businesses and consumers will benefit from this outcome as it provides generous benefits for rail workers and certainty that rail service will not be interrupted. We must remember that our economy depends on the hard work of rail workers and the railroads, and averting a strike is a win for our country. We thank President Biden and Congress for helping secure America’s rail service.”
Trade groups warned that failure to avert the strike could cost the U.S. economy at least $2 billion a day – affecting 30 percent of U.S. cargo shipments and leading to a 1 percent decline in the nation’s gross domestic product if the strike were to last a month.
“Delivering for America is what our industry does best. A strike of this nature will bring the free flow of critical goods and services in America to a halt, hamstring an already fragile supply chain during a time of continued economic uncertainty, and lead the country down an untenable path,” said Seth Waugh, vice president of government relations for the National Association of Wholesaler-Distributors. “President Joe Biden, the self-proclaimed ‘most pro-union President in history,’ worked directly with the rail worker unions to come to an agreement in September that would have prevented a rail strike. Now, several of those union bosses are attempting to hold America’s economy hostage by beckoning a crisis that is 100 percent preventable.”
More than 400 business and trade groups, including FEDA, sent a letter to congressional leaders on Nov. 28 urging them to act to prevent a railroad shutdown. “No one wins when the railroads stop running,” the letter stated. “Congress recognized their necessity to interstate commerce and America’s economic health with the passage of the Railway Labor Act and past congressional interventions in rail labor disputes when other steps fail. Indeed, Congress has intervened 18 times since 1926 in labor negotiations that threaten interstate commerce and there is no reason why Congress should deviate from this record today. While a voluntary agreement with the four holdout unions is the best outcome, the risks to America’s economy and communities simply make a national rail strike unacceptable. Therefore, absent a voluntary agreement, we call on you to take immediate steps to prevent a national rail strike and the certain economic destruction that would follow."