At a time of year when transportation and freight are already pressed, the possibility of a major rail strike threatens to further disrupt the US economy. In September, a tentative agreement was made between rail companies and unions, temporarily preventing a strike. Now it appears that a strike may be imminent next month.
Contract negotiations have been ongoing for three years. While there was recent headway on raises and bonuses, the largest unions have refused to settle. One of the major sticking points is the failure of the railroad companies to provide paid sick time. The railroads have held that strict attendance policies are necessary due to staffing shortages, while the unions blame the shortage on intentional layoffs and downsizing.
Some of the rail unions have already signed on to the new agreement, though it must be universally accepted by all 12 unions to avoid a strike. One of the largest of the unions has recently rejected the proposed agreement, making a strike in December a strong possibility. Polling indicates that the unions are divided in two nearly equal camps – those who will accept the contract as-is and those who are willing to strike for better benefits and working conditions (1).
The Biden Administration had stepped in to prevent the strike in mid-September, initiating a 90-day pause on any potential strike. The Presidential Emergency Board provided recommendations for a potential contract, which included only one paid sick day – far short of the 15 paid sick days requested by the unions. Union members are seeking no less than 4 paid sick days.
For context, in the US the average full-time worker receives 8 paid sick days per year and 96% of employers offer paid sick leave. Union workers from all fields, average 10 days per year. Additionally, workers who receive paid sick days generally only use half the time provided by their employers (2).
Many railroad union members feel that sick days are the bare minimum that should be offered, given how well they have performed to keep the railroads operational with significant staff shortages. Crew sizes have been drastically reduced and workers have been expected to work longer hours for more days with very limited time off. This has led to substantial profits for the railroads and a difficult work-life balance for many rail workers.
With the early December deadline rapidly approaching, a strike feels unavoidable, as neither side is willing to compromise enough to pass an agreement. A rail strike would be expected to cost the US economy billions (3), in addition to potential security issues with hazardous materials and chemicals. Congress could potentially intervene again and require another “cooling-off” period to extend negotiations. This is a situation to watch closely, as the consequences of a strike will be far-reaching and potentially catastrophic for both the economy and the supply chain.
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