Biden administration scrambling to avert potential rail strike as deadline nears

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The Biden administration is ramping up its involvement in negotiations between rail companies and the unions representing railroad workers as the deadline nears to avert a potential strike that threatens to cripple the economy just ahead of the midterm elections.

The National Mediation Board and U.S. Labor Secretary Marty Walsh met Wednesday with major freight railroads and unions involved and set further talks this week to reach an agreement before the current contract runs out Friday, Sept. 16, at midnight, the department and a railroad group told Reuters.

U.S. Secretary of Labor Marty Walsh speaks at a press conference after touring the Port of Los Angeles

U.S. Secretary of Labor Marty Walsh speaks at a press conference after touring the Port of Los Angeles. (Mario Tama/Getty Images / Getty Images)

President Biden appointed a Presidential Emergency Board (PEB) in July that proposed a plan calling for 24% in cumulative raises and thousands in additional bonuses over a five-year contract covering some 115,000 rail workers. 

But so far, only five of the 13 unions involved have agreed to the deal, leaving plenty of ground to cover over the next seven days to stave off an essential halt to rail freight that could potentially decimate an already-fragile supply chain.

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The Association of American Railroads (AAR) said Thursday that a rail shutdown would cost the economy upwards of $2 billion a day, warning in a press release that a strike would “immediately harm every economic sector by rail” and “trigger retail product shortages, widespread manufacturing shutdowns” and “job losses.”

A BNSF train pulls out of yard

The head of the nation’s largest railroad union says the report designed to help resolve stalled contract talks with freight railroads didn’t do enough to address concerns about working conditions, even though it recommended 24% raises. (AP Photo/Shafkat Anowar, File / AP Newsroom)

The association alerted Congress to be ready if an agreement is not reached in time and a strike occurs, urging lawmakers to impose the PEB deal if it does step in to oversee bargaining under the Railway Labor Act.

“Like those unions that have already tentatively agreed to the PEB deal, each of the remaining unions can still enter into agreements based on these recommendations,” AAR president and CEO Ian Jefferies said in a statement. “However, should negotiations fail and result in a work stoppage, Congress must act to implement the PEB recommendations — rewarding employees and stopping unnecessary economic harm and uncertainty for rail customers.”

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The nation’s largest railroad union, the Sheet Metal, Air, Rail and Transportation Workers (SMART), is one of the eight unions that have not accepted the PEB deal. SMART president Jeremy Ferguson said last week that while the PEB deal is a “vast improvement” over the railroads’ previous proposals, “the recommendations do not go far enough to provide our members with the quality of life that they have earned, and that both they and their families deserve.”

A freight train parked in rail yard

Labor expert and National Right to Work Foundation president Mark Mix said that he suspects a last-minute agreement will ultimately be reached to avoid a strike, given the effects a rail shutdown would have on the entire economy. (AP Photo/Elaine Thompson, File / AP Newsroom)

Labor expert and National Right to Work Foundation president Mark Mix told FOX Business that he suspects a last-minute agreement will ultimately be reached to avoid a strike, given the catastrophic ripple effects a rail shutdown would have on the entire economy.

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“If they really do stop all the trains… boy, can the economy sustain another hit like this?” Mix said. “We’ve got food shortages, we’ve got droughts and water problems on the West Coast, and now if we overlay all of that — this power that unions have gotten over very essential elements of our economy — they can hold the entire country hostage.”

FOX Business’ Ken Martin and Reuters contributed to this story.

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