The looming rail strike could paralyze the US economy and transportation

A major rail strike is looming that could cripple the nation’s supply chain and rail freight service if both sides fail to reach an agreement by the end of the week.

Unions said workers are trying to improve working conditions, accusing railway companies of penalizing workers for taking medical leave. Unions have said rail companies are jeopardizing the nation’s economy to force a deal.

The National Carriers’ Conference Committee (NCCC), which represents the nation’s freight railways in national collective bargaining, said railroad employees are given “meaningful” leave and that companies have offered a fair contract that includes a wage increase. significant.

While 9 unions have reached interim agreements, ongoing negotiations with two resisters could lead to a strike as early as 00:01 on Friday, as the cooling-off period under the Railway Labor Act ends and strikes become legal.

Labor Secretary Marty Walsh will meet on Wednesday with railway company officials and union leaders to help them reach an agreement, White House Press Secretary Karine Jean-Pierre said Wednesday.

Marty Walsh, United States Secretary of Labor, speaks at SelectUSA’s Investment Summit in National Harbor, Md., June 28, 2022.

Ting Shen / Bloomberg via Getty Images, FILE

The two resistant unions – the Brotherhood of Locomotive Engineers Trainmen, or BLET, and the SMART Transportation Division, or SMART-TD, represent 57,000 engineers and conductors, who make up about half of all railway workers.

Some 4,900 rail workers with a third resistant union – the International Association of Machinists and Aerospace Workers (IAM) District 19 – have turned down a deal with the NCCC and go on strike in two weeks if no deal is reached with the rail companies. the union said Wednesday.

“The artery of the US economy is the rail system. It’s one of the ways we get everything going. A third of everything goes this way. And when you cut it, you have a stroke,” Diane Swonk, chief economist at Global tax company KPMG said in an interview with ABC News.

A potential strike could lead to $ 2 billion a day in lost economic output, according to the Association of American Railroads, which lobbies on behalf of rail companies. Freight railways are responsible for carrying 40% of the nation’s long-haul freight, and a work stoppage could jeopardize these shipments.

“The railways are using freight forwarders, consumers and our nation’s supply chain as pawns in an effort to get our unions to give in to their contractual demands knowing our members would never accept them,” said BLET and SMART-TD. in a joint statement on Sunday.

The NCCC urged the unions to accept a deal.

“It is imperative that the remaining unions promptly reach agreements that provide wage increases to employees and prevent disruptions to rail service,” the NCCC said in a statement Tuesday.

The potential impact for Americans

Should a strike happen, Americans will feel the effects in their wallets, Swonk said.

“It means everything from the potential layoff, at the same time prices will continue to rise and you will see more empty shelves in your store,” Swonk said.

Rail is central to the entire freight side of the economy, including manufacturing, warehousing, retail and agriculture. According to economist Mark Zandi, if there was a train strike of more than three or four weeks, commodity prices, which have fallen from a June peak as supply chain stress eases and helps reduce inflation. , would likely increase again, further tightening of inflation.

“We already have an economy that is slowing down and inflation is consistently high – that’s a bad situation to be in. Add this extra layer where we might see some prices accelerate and the inability to get some goods entirely because they don’t. I’m available longer, it’s a bad place to stay, “Swonk said.

In recent days, there have been urgent requests for resolution from trade groups representing producers, retailers, oil companies and even beer sellers.

Amtrak announced Wednesday that it will cancel all long-distance trains starting Thursday as negotiations continue and Friday’s deadline to avoid a strike approaches.

Although Amtrak and its workforce are not involved in the negotiations, it had already begun “gradual adjustments” to its service in preparation for a possible disruption of rail freight service.

The company said such an interruption “could have a significant impact on intercity passenger rail service”.

Talks between trade unions and railway companies continue

The unions still at the table continue to demand better leave policies for their workers. And as Friday’s deadline looms, government officials are intervening.

Railway companies regularly penalize workers for taking sick leave or a doctor’s appointment, BLET and SMART-TD said in a statement on Sunday.

“No working-class American should be treated with this level of workplace harassment for simply getting sick or going to a routine medical examination,” the unions said.

Unions said these policies forced “thousands of employees” to leave the industry and made it “impossible” to recruit new workers.

PHOTO: A freight train with BNSF locomotives crosses a level crossing along a CSX line on August 26, 2022, near Albion, Ind.

A freight train with BNSF locomotives crosses a level crossing along a CSX line on August 26, 2022, near Albion, Ind.

David Boe / AP, FILE

A presidential emergency council, meeting last month by the Biden administration, has issued recommendations for a compromise between unions and railway companies. Recommendations included a 24% increase from 2020 to 2024 and bonus increases, but omitted the union’s request for a new permit policy.

“Railway employees have a significant vacation period,” the NCCC says on its website. “The trade unions have proposed that the PEB recommend an additional paid period of sickness and the operating artisan unions have also proposed to cancel the existing rail presence policies until new policies are reached which need to be negotiated with the unions.”

“The PEB, however, has recognized that the railways’ rights to unilaterally establish and change reasonable attendance policies have been recognized for years,” the NCCC said.

The IAM 19 district union, which rejected an attempted agreement with the NCCC, agreed to push its strike until September 29 “out of respect for other unions in the ratification process.”

President Joe Biden called officials from both the union and the railway company on Monday, Jean-Pierre said.

“We have made it clear to stakeholders the damage that American families, businesses, farmers and communities would suffer if they did not reach a resolution,” Jean-Pierre told reporters.

A Department of Labor spokesman said: “Secretary Walsh continues to lead discussions at the Department of Labor between railway companies and unions. The parties are negotiating in good faith and have pledged to stay at the table today.”

Democrats in the House on Wednesday expressed cautious optimism that the negotiators will reach an agreement to prevent a nationwide rail strike.

House Speaker Nancy Pelosi told reporters that members of Congress and the White House are heavily involved in the talks and attributed the current disagreement with the unions to the lack of sick leave for railway workers.

But she and other Democratic leaders paused before asking Congress to pass a bill: they want the negotiations to resolve themselves.

Republican Senator Roger Wicker of Mississippi and Richard Burr of North Carolina tabled a resolution on Monday that would end any potential strike and enforce PEB recommendations.

Molly Nagle, Zunaira Zaki, and Trish Turner of ABC News contributed to this report.

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