Railroad corporations and labour unions in the United States reached a ‘tentative agreement’ on Thursday (September 15) after 20 hours of protracted negotiations mediated by Labor Secretary Marty Walsh, narrowly averting a freight railroad strike that would have caused havoc to supply chains and disrupted the US economy. Calling it “a win for tens of thousands of rail workers who worked tirelessly through the pandemic,” US President Joe Biden said in a statement, “these rail workers will get better pay, improved working conditions, and peace of mind around their healthcare costs: all hard-earned. “The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come,” he added. Workers will receive an immediate 14% raise, which will increase to a total raise of 24% over five years, CBS News reported. They will get annual bonuses of $5,000 and their health care co-pays and deductibles will remain unchanged. The agency reported that the chief demands of the union were also met by the deal, namely extra paid days off and the ability to take leave for medical care. The railroad corporations and labour unions had to reach an agreement by midnight on Friday (September 15), failing which thousands of railway workers could legally begin their nation-wide strike, the first of its kind in the US since 1992. Why were rail workers threatening to strike? For almost three years now, railway corporations and labour unions in the US have been at the opposing sides of a protracted conflict over a new contract that would address railway workers' concerns of poor working conditions, lower salaries and scheduling problems. Between November 2018 and December 2020, the US railway industry lost 40,000 jobs, and the downsizing led to big windfalls at major rail corporations, the Guardian reported. Most of the 12 labour unions, representing more than 100,000 railway workers, had agreed to a proposal formed by a Presidential Emergency board formed on July 25 to resolve the dispute between freight rail carriers and their unions, as reported by Vox. This proposal included a 24 per cent increase in salaries for workers by 2024. However, many workers have criticised the agreement, claiming that it did not address other key issues that make it difficult to work in the industry. Workers are opposing the points-based attendance policies used by the Warren Buffet-controlled BNSF and Union Pacific, two of the largest freight railroad corporations in North America, which reportedly penalise workers for taking time off even for visiting a doctor. Workers state that they are also facing difficulty with labour cuts, inflexible work schedules and attendance policies. The Washington Post reported that conductors and engineers claim that they can be made to work for 14 consecutive days without any breaks, and that they do not receive any sick days. What would have been the impact of the strike? Large parts of the US economy are dependent on freight railroads, including agriculture, industries, retail, wholesale and retail sectors. In a report published this month, the Association of American Railroads claimed that a nationwide railway shutdown could cost the US economy more than $2 billion a day. The New York Times reports that railways do not only play a crucial role in domestic trade, moving around two-fifths of long-distance American freight, but also transport one-third of the country’s exports, playing an important role in the global supply chain as well. While only freight rail lines in the US faced the threat of a strike, CNN reports that many of the commuter trains in the country move across tracks managed by freight railroads. Therefore, many passenger railroads would not be able to operate if the freight strike began. Amtrak, which handles almost all intercity passenger trains in the US, had announced on Wednesday (September 14) that it would cancel all its long-distance routes starting from Thursday (September 15) in light of a likely rail shutdown. What are the political ramifications? Resolving the dispute was of immense importance to Biden, who has long presented himself as a champion of unions and blue-collar workers in America. On Labour Day (September 5), a US federal holiday in honour of the American labour movement, President Joe Biden met union workers and repeated his oft-repeated pledge to be the “most pro-union President in American history.” Biden said that he has been “encouraging unions,” and endorses them as a “key way to building the economy, to grow us from the bottom up and the middle out.” The stakes for the Biden administration are especially high, with the looming midterm elections in November that will determine if the Democratic Party can maintain their fragile control of the House of Representatives and Senate, the lower and upper houses of the US Congress respectively. The resolution of the strike is of great significance for Biden, who attempts to balance both the demands of the labour unions whose electoral support he seeks, while simultaneously ensuring that supply chains are not adversely affected, especially in light of the rising rates of inflation and consumer costs that are plaguing his administration.
