Railroad strike averted for now — but the future is far from certain
The U.S freight railroad system is in (and has been in) crisis. For example, from November 2018 through December 2020, the railroad industry lost 40,000 jobs. Even more staggering, the railroad industry dropped from more than 1 million workers in the 1950s to less than 150,000 in 2022.
Two of the largest railroad companies — BNSF and Union Pacific — reported record profits during the global pandemic due to record demand. For example, NBC News reports that BNSF enjoyed a net income of almost $6 billion in 2021, reflecting a 16 percent profit increase over the previous year. Likewise, Union Pacific rings in at $6.5 billion in net income in 2021, showing a 6 percent profit increase over the previous year.
Meanwhile, railroad workers are angry, complaining about labor cuts, few paid days off, low wages and poor working conditions. Additionally, unions say workers are now being punished for taking any days off at all, even if these requested days fall on the weekends, during the holidays, or even during illness or personal emergencies, according to multiple news reports.
There’s no doubt that a railroad worker strike would wreak havoc on an already crippled supply chain — leading the White House to urgently make a temporary deal between railroad employers, unions and workers for fear of what a strike could do to the U.S. economy.
On Sept. 15, the White House released a statement about a tentative agreement between labor unions and railroad companies, averting a workers’ strike. However, whether the unions’ membership will vote to ratify the deal remains to be seen.
What if railroad workers did strike?
So, what would happen if this temporary agreement fell through, and railroad workers did strike? According to the Association of American Railroads (AAR), “a freight rail shutdown idling more than 7,000 long-distance Class I trains per day — in addition to short line, passenger and commuter trains — would be devastating,” creating at least $2 billion per day in economic losses.
Impact on raw materials and finished products
And this strike wouldn’t just impact commercial carriers. A strike would idle “more than 7,000 long-distance Class I trains per day — in addition to short line, passenger and commuter trains [impacting] tens of thousands of rail customer locations, from sprawling auto plants to mom-and-pop retailers, depend on railroads to deliver raw materials and finished products,” according to AAR. These work stoppages would directly impact the automobile, agricultural, manufacturing, health care, energy and retail sectors in the U.S., Mexico, and Canada. For example, General Motors’s Chief Executive Officer Mary Barra told Reuters that the “rail shutdown would have forced the closure of some truck plants ‘within a day’ and snarled new car deliveries to dealerships.”
Impact on travel and commuting
A railroad worker strike would also disrupt travel and commutes in addition to goods and commodities shipments. For example, 97 percent of Amtrak’s 22,000-mile system “consists of tracks owned and maintained by freight railroads,” AAR says.
And it’s not all on the tracks. AAR notes U.S. freight railroads also “furnish other essential services to Amtrak in some regions, including train dispatching, emergency repairs, station maintenance and, in some cases, police protection, claims investigation and communications capabilities.” Thus, a strike would also devastate ridership and passenger travel.
Although Amtrak employees were not part of the strike talks, the company announced on Sept. 14, “the cancellation of long-distance passenger trains because it uses freight tracks that could be disrupted by work stoppages.” Once the White House’s temporary agreement fell into place the next day, Amtrak stated that it was working to “quickly restore canceled trains,” causing headaches for travelers nationwide.
How do unions control the future of freight (and its workers)?
Although the railroad workers’ strike is temporarily on hold, we have yet to see if the membership of the 12 railroad unions involved will vote for the mid-September agreement. While union leaders and railroad employers seem optimistic about a possible resolution, railroad workers feel differently.
According to The Guardian, many workers claim that most of their complaints aren’t addressed in the most recently proposed labor contracts by 10 of the 12 labor unions involved. Specifically, according to the BLET Local 51 vice-president, the Presidential Emergency Board (PEB), a national mediation board appointed by President Joe Biden, “punted on just about every single issue, and left [workers] feeling kind of betrayed and kind of vacant, because of the discontent on the railroad right now.”
Furthermore, the Brotherhood of Locomotive Engineers and Trainmen (BLET) and the International Association of Sheet Metal, Air, Rail and Transportation Workers (Smart), representing half of railroad union workers, claim that workers will strike if the quality of life issues aren’t resolved.
According to some workers, a strike may not be the worst of it. Locomotive engineer for Union Pacific Michael Paul Lindsey told The Guardian that the government “can try to force us out of a strike, but they can’t force us to not quit, and that could result in an even bigger effect on the economy. Congress needs to think long and hard before they force it within the strike, because if they do, it will have a much bigger strike as people resign and leave the industry.”
Getting tens of thousands of employees to agree with union proposals with Washington D.C. monitoring the negotiations is hardly easy. These railroad unions are very powerful — as is the federal government. So, are individual workers’ concerns really at the forefront of averting yet another economic crisis?
Unfortunately, perhaps, time will tell.
Ayesha J. Whyte is chief people officer and employment attorney at Dixon Whyte LLC with expertise in employee engagement, inclusion and culture.