Despite the intimate involvement of President Biden and Labor Secretary Marty Walsh to develop a comprehensive new contract structure for some 120,000 U.S. freight rail workers, there is growing fear some workers will fail to accept the terms. Voting “no” on the agreements means these workers could strike, which would lead to a shutdown of the nation’s quiet but mighty rail network that moves some 40 percent of goods in the country as measured by weight. Analysis says the economic hit to our economy would be at least $2 billion per day.
Congress has clear authority to intervene in such an instance and should do so. Consumers, domestic industries, and our economy cannot weather a rail strike during the holiday season. Congressional action, if needed, would still deliver favorable gains for workers.
By way of background, there are 12 freight railroad unions involved in collective bargaining. Seven of the twelve have already agreed to terms, while 3 unions have rejected the proposed contracts. Two are still voting.
Labor unions petitioned Democratic lawmakers for mediation that was then granted, to be overseen by the National Mediation Board. They then asked to be released from mediation, which the supposedly independent agency also granted. Industry observers note this approval was granted in record time.
This triggered President Biden to create a panel of hand-picked arbitrators to what is called a “Presidential Emergency Board.” These individuals studied the issue extensively, producing a report that recommended nearly 25 percent pay raises, more than $10,000 in back pay, preservation of platinum health care plans and annual bonuses of $1,000.
As economic commentator Steve Forbes recently wrote, “Many workers would love such a perk.” These terms have been the basis of the contracts already ratified by the majority of labor unions. The two largest unions, with votes due on Nov. 21, secured additional personal days on top of the base framework.
Most view the issuance of such a report as the end of the road in these situations — particularly lawmakers who rightly want this to be resolved voluntarily. After all, labor asked for the non-binding arbitration and not only received it, but did so under the most labor-friendly president ever. This is no corporate cabal to hurt workers.
In fact, the largest union currently threatening to strike and rejecting these terms they sought said the presidential panel was “the only avenue” to remedy the matter and said it would “bring this round to a close.”
And yet there is an ongoing effort to move the goal posts and continue negotiating when negotiating has closed. It shouldn’t be tolerated.
Since the prospect of a rail strike cropped up in the summer, countless industries have made clear a strike would be unequivocally disastrous. No one understands this more than the White House, which not only brokered the deals but celebrated them in a Rose Garden ceremony.
All workers are important, but Congress must weigh the actions of the problematic labor unions and their last-minute demands with the millions of workers who would be affected by a strike. Why is the deal at hand good enough for most unions, but not a few holdouts? And why would this handful of workers be more important than the millions of workers — many unionized — in industries ranging from agriculture to manufacturing to retail?
The answer is obvious and so too is the path for Congress if select unions call for a strike to derail the economy during its busiest season. We have reached the end of the line; federal lawmakers must legislate the framework already signed by a union majority and agreed to by labor leaders, management, and the White House.
Gerard Scimeca is an attorney and serves as chairman and co-founder of CASE, Consumer Action for a Strong Economy, a free-market oriented consumer advocacy organization.