The clock is ticking for the rail haul industry and reluctant unions to reach agreement on a new contract and avert an economy-crippling strike just weeks before midterm elections.
Nine of the 12 unions representing rail workers have negotiated an agreement with the industry based on a framework created by members of the Biden administration-appointed presidential emergency committee. However, two unions – the International Association of Sheet Metal, Air, Rail and Transportation Workers and the Brotherhood of Locomotive Engineers and Trainmen – are the most prominent advocates when it comes to pushing through their demands.
The Hill reported on Wednesday that nearly 5,000 rail workers from the International Association of Machinists and Aerospace Workers (IAM), according to the union, voted to reject an interim contract agreement with railroads and authorize a strike.
IAM members are the first to agree to a strike and reject a deal based on recommendations released last month by a White House-appointed board.
Meanwhile, corporations and industry groups are calling on Congress to step in and enact the Biden framework to stave off a network shutdown.
“We are writing today to seek your guidance on the possible implementation of a contract between all parties in the rail freight industry by the end of the cooling off period – 16 September 2022 – to avoid a debilitating and unnecessary disruption to work that could cost the Land billions every day,” the American Trucking Association wrote to convention leaders last week.
And as fall approaches and homeowners face staggering bills for heating oil and other fuels, the American petroleum industry warned of dire consequences in its own letter to Congress on Tuesday.
“Last Friday, representatives of the oil and gas industry received initial notifications from the railroads that, starting today, they intend to restrict the movement of hazardous materials and other chemicals to ensure that in the event of a work stoppage, no carloads of products are left stranded on the rails. This cut alone could have a profound impact on our industry’s ability to bring critical energy supplies to market,” wrote Frank Macchiarola, `I’s senior vice president of policy, economics and regulatory affairs.
“`I urges Congress to prepare to act if negotiations fail to result in a deal this week to enable a workable deal and prevent catastrophic disruption to the freight rail network.”
While it’s still unclear whether Congress will act, Marc Scribner, senior transportation policy analyst at the Reason Foundation, said pressure is mounting for Washington to get involved.
“Congress members from both parties are growing frustrated with union intransigence and are unlikely to tolerate a strike given the current supply chain issues and the lag before their midterm elections,” Scribner said. If a strike does occur, Scribner could see Congress act within 24 hours to “end the strike and enforce the[Presidential Emergency Board]’s recommendations as a final solution.”
The administration hopes to avoid this outcome. According to Politico, Secretary of Transportation Pete Buttigieg and Secretary of Labor Marty Walsh are encouraging a deal. Meanwhile, President Biden is reportedly making phone calls to get companies and unions to come to an agreement.
Railways and unions have been working on a new collective agreement since November 2019, but have made little progress. Biden established the Presidential Emergency Board through an executive order in July, directing it to “provide a structure for workers and management to resolve their disagreements.” The board’s report, released on August 17, was seen as a significant win for workers and called for a 24% wage increase over the five years from 2020 to 2024. A 14.1% wage increase would take effect immediately.
“The recommendations also include five annual lump sum payments of $1,000, adjustments to health premiums and limited changes to work rules,” the National Carriers Conference Committee said in a statement. “Some of the pay increases and lump sum payments would be retroactive, resulting in an average of more than $11,000 in immediate payouts to employees.”
If accepted by rail companies and unions, the recommendations would result in the largest overall wage increase in 40 years. In fact, rail industry insiders say it’s the biggest pay rise in modern history, and the process has unfolded exactly as the unions wanted. The proposed salary increases were significantly higher than those proposed by the rail companies.
The sticking points have nothing to do with the payment.
In a statement released Sunday, the International Association of Sheet Metal, Air, Rail and Transportation Workers said the Presidential Emergency Board “was wrong on this issue.” The union is therefore demanding improvements in working conditions, which have been on the negotiating table since the start of the negotiations.
“The punishment of engineers and conductors for illness or doctor’s visits with dismissal must be prevented under this contract regulation,” says a press release from the union. “No working-class American should be treated with this level of harassment in the workplace simply because they get sick or go for a routine doctor’s visit.”
The rail industry emailed the media on Tuesday, arguing that the union’s claim that employees are not getting time off is categorically false.
A strike would be disastrous for a US economy still plagued by supply chain problems. And Tuesday’s inflation figure, which remained almost constant at 8.3% annually, included news that food prices rose 13.5% year-on-year.
No goods on trains means no products on trucks and even higher prices in shops due to supply and demand. As a result, organizations like the Beer Institute and Retail Industry Leaders Association like the American Trucking Association are urging Congress to get involved.
“A strike could reportedly hurt the economy by up to $2 billion a day in lost activity,” said Michael Hanson of the Retail Industry Leaders Association. “Without a voluntary agreement by the September 16 deadline, Congress should act quickly to implement the recommendations of the[Presidential Emergency Board].”
Chris Woodward writes about industry and technology for InsideSources.com.
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