President Joe Biden blocked a strike Friday by the nation’s railroad workers by naming a board to help resolve the dispute.
Rail labor unions were preparing to strike July 18 when a federally mandated “cooling off period” expired, however, Biden’s order extends that period for 60 days.
The board’s recommendations aren’t legally binding, but can serve as a jumping off point for compromise.
The board has 30 days to investigate followed by another 30 day cooling off period during which the unions can’t strike and the railroads can’t lock out their workforce.
If an agreement isn’t reached, the unions would be free to strike, however Congress could intervene to extend the cooling off period or passing a law codifying the emergency board’s recommendations.
Both sides praised the order Friday while expressing optimism it would advance their causes.
The unions have been working for a contract that will pay rail workers a fair wage at a time when carriers are making massive profits and cutting jobs, said Greg Regan, president of the Transportation Trades Department of the AFL-CIO, in a statement.
The carriers countered that their proposal will put workers in the best position to appropriately reward rail workers while growing the industry and keeping it competitive, according to a statement from the National Railway Labor Conference, an industry trade group.
What are they bargaining over?
The two sides are miles apart on negotiations over wages and benefits.
Rail carriers have asked for workers to contribute more to their health care benefits, which, according to an industry trade group, brings those plans more in line with similar union contracts.
The average railroad worker pays $228.89 per month regardless of family size, said Michael Maratto, a spokesperson for the National Railway Labor Conference, a trade group representing rail carriers in union negotiations, in an email.
“The reason our healthcare benefits are so good is because we had to give up wage increases to get them,” said Dennis Pierce, president of the Brotherhood of Local Engineers and Trainmen.
Unions say carriers have offered a 16% raise over a five to seven year period. They argue that’s barely enough to keep up with inflation and is effectively wiped out by extra health care costs.
Railroad workers earn an average of $130,000 per year in wages and benefits, Maratto wrote.
He wouldn’t confirm the specifics of the carriers’ wage proposal, but noted, “the railroads are proposing significant increases to be effective on July 1, 2022, along with full retroactive pay for increases to be attributable to 2020 and 2021.”
Those retroactive increases, along with raises in 2023 and 2024 will cement rail road employees’ status as some of the best paid in the nation, Maratto wrote.
Rail workers’ pay is high because they work so many hours, said Chris Bond, a Fort Worth-based union official and rail engineer for BNSF.
Bond said he works about 12 hours on his regular run from Fort Worth to Oklahoma City. This is usually followed by a forced 12- to 16-hour unpaid stay in a hotel until he can catch another train run back to Fort Worth.
“We’re away from our families. We’re away from everybody,” Bond said.
Pierce added that rail worker pay is reflective of the advanced skill needed to operate and drive a sometimes two-mile long train over long distances.
“At any given day a single engineer is running three different sets of locomotives on a set of screens all independently of each other all at the same time,” Pierce said.
He echoed Bond noting that some rail workers can be away from their families for as long as 60 hours at a time. That’s after getting 90-minutes notice of a requirement to report to work.
“You gotta pay people pretty well to do that job,” he said.
How’s it going to affect me?
A rail labor strike would be a huge hit to the U.S. economy. Around 28% of U.S. freight is moved by rail, according to the U.S. Department of Transportation, and any stoppage could damage an already weakened supply chain.
Annual inflation was up 9.1% in June, according to the U.S. Bureau of Labor Statistics, driven by increases in food, shelter and gas.
Labor shortages are already affecting the railroads.
An April hearing of the Surface Transportation Board found labor shortages were leading to delays and limits on the number and kinds of goods that could be transported by rail.
Shameek Konar, CEO of the gas company Pilot/Flying J, told the board his company accounts for 20% of the United States’ diesel supply, and Union Pacific asked Pilot/Flying J to cut its shipments by 50% in April.
In June, the Surface Transportation Board ordered rail companies CSX, Norfolk Southern, Union Pacific, and Fort Worth-based BNSF to come up with a detailed plan to address their performance. It cited “short-sighted management of labor forces.”
