Biden Faces Threat of Another Catastrophic Rail Strike: Members of Freight Union Reject Labor Deal

A strike will likely increase after two railroad unions rejected a labor deal with major railroads. If it occurs, the strike could cause $2 billion per day to damage the economy.

According to the Brotherhood of Railroad Signalmen, almost 61 percent of workers voted to oppose the five-year contract, even though it included $5,000 in bonuses and 24 percent raises.

The union is the second rail union to reject a deal within the month. Over half of track maintenance workers, represented by the Brotherhood of Maintenance of Way Employees Division (BMWED), voted to oppose the contract.

BMWED set a November 19 deadline to get a deal in place before a strike would happen, according to the union’s Facebook page.

Michael Baldwin, president of the union, endorsed the Labor Secretary Marty Walsh, who brokered the deal, citing a “lack of good-faith bargaining” on the part of the railroads. He said the recommendations of arbitrators that President Joe Biden appointed over the summer denied the “basic right of paid time off for illness” for workers.

Unions say the railroads can easily afford to offer paid sick time, with some railroads reporting more than $1 billion in profit in the third quarter. Negotiations included Norfolk Southern, CSX, BNSF, Union Pacific, and Kansas City Southern railroads.

Railroads maintain that unions have long agreed to forego paid sick leave during decades of negotiations in favor of more generous short-term disability benefits that kick in after a span of four days of absences and last up to a year, along with higher wages.

In negotiations, railroads have refused to offer more than what was recommended by the Presidential Emergency Board of arbitrators. The board rejected requests from the unions for paid sick time in favor of providing the highest wage increases in over four decades.

Six of the smaller unions have approved deals with the railroads. However, the union representing track maintenance workers, the large Brotherhood of Maintenance of Way Employees Division Union, rejected the proposed contract as workers were concerned about the lack of paid sick leave.

The two biggest railroad unions, representing engineers and conductors, are greatly affected by the railroads’ demanding schedules and will not announce their votes until mid-November. The 12 railroad unions represent 115,000 workers across the country and must all approve railroad contracts to avoid strikes. The unions that rejected the deals agreed to continue talks and return to the bargaining table through at least November 19.

Jean-Pierre: Economy “under no immediate threat”

Karine Jean-Pierre, White House Press Secretary, emphasized that despite increasing opposition to the tentative agreements, the U.S. economy is “under no immediate threat.” The press secretary said the administration is ready to take the appropriate steps to ensure the rail system continues functioning.

However, Jean-Pierre declined to say whether the president would get involved personally in the negotiations between the unions and rail companies like he did a month ago before the initial strike deadline. Congress may step in to impose terms on workers and block a strike if both sides cannot agree on new contracts.

A rail strike could choke car parts supplies and already scarce computer chips, forcing the temporary shutdowns of some of the U.S.’s auto plants. It would also disrupt the flow of new trucks and cars to dealerships across the country, of which 75% are transported by rail.

According to a study published in September by the American Association of Railroads, everything from plant shutdowns to food delivery delays and increased road traffic could be affected if the strike happens and train transport grinds to a halt.

Marty Walsh, Labor Secretary, sounded the alarm about how bad it may get if there was a strike when the now-rejected settlement was announced in September. “It’s like, Holy Christ: The magnitude of what would have happened. We’ll never fully understand, thank God.”

“The cost will grow geometrically the longer the strike lasts,” said Anderson Economic Group’s Patrick Anderson. “After a week, you’d see real damage in the U.S. economy.”