Freight Railroads, Unions Weigh Compromise Ahead of Strike Deadline
Friday is the deadline for North American freight railroads and their labor unions to accept a labor contract compromise proposed by a White House task force. If accepted, it will raise the railroads’ labor costs. Unions representing 90,000 rail workers are threatening to strike over unaddressed working conditions.
Railroad workers’ labor contracts have been at an impasse since expiring in 2020, as attrition has exacerbated crew shortages and hurt service. The Presidential Emergency Board’s proposal would raise wages 24% over five years, through 2024. Rail executives had offered a 17% hike, but supported the PEB plan.
Five of the 12 rail unions said they would take the deal back to their 25,000 members, even though they had wanted a bigger raise over five years. Seven other unions had sought work scheduling reforms amid efficiency techniques that had produced record profits.
A freight rail stoppage would occur as America’s farmers harvest their crops and could worsen global food insecurity, the Agricultural Transportation Working Group told Congress. A shutdown could also hurt Democrats’ ties with union and blue-collar voters ahead of the midterm elections.
A nationwide freight shutdown could cost up to $2 billion a day, and ripple through the economy, the Association of American Railroads predicts. It could also worsen inflation, result in plant shutdowns, lost jobs and higher costs for consumers and businesses