GOP Rep Warns US Rail Strike Could Devastate Economy, Deal Failure 'Not An Option’

Back in September, US President Joe Biden frantically worked to avert a freight rail strike, stepping into the fray to broker a tentative agreement between the rail industry and union representatives to “avoid disruptions of our economy.”

Failure to deter a railway strike would be devastating to the US economy, already struggling with rampant inflation and recession fears, a Republican lawmaker has warned.

Rail workers have been demanding pay increases, reviewed schedules, stronger safety standards, and the ability to take time off if they are sick or for a doctor’s appointment.

The overall cost of such a walkout, fraught with disrupted supply chains, could amount to $2 billion daily, Congressman Brian Fitzpatrick, R-Pa., told US media, adding that if the industrial action were to drag out for a month, it might result in the loss of 700,000 jobs.

A Union Pacific freight train carries cargo shipping containers along a rail line at sunset in Bosler, Wyoming on August 13, 2022.

© PATRICK T. FALLON

Negotiations were ongoing between railroad unions and companies, so “congressional intervention is a last resort,” said the lawmaker after one of the largest railroad unions voted down a deal brokered earlier by POTUS. However, if the talks fall through, Fitzpatrick added, Congress “will not let this strike happen.”

“That’s for sure. It would be devastating to our economy. So, we’ll get to a resolution one way or another,” Fitzpatrick, co-chief of the Problem Solvers Caucus bipartisan lawmakers' group, stated.

Workers of the Sheet Metal, Air, Rail and Transportation Workers’ Transportation Division (SMART-TD) rejected the deal, it was announced on November 21. SMART-TD did not provide the reason behind the members' disapproval.

"SMART-TD members with their votes have spoken, it’s now back to the bargaining table for our operating craft members. This can all be settled through negotiations and without a strike. A settlement would be in the best interests of the workers, the railroads, shippers and the American people,” SMART-TD President Jeremy Ferguson said.

It was clarified that after a "status quo agreement" ended on December 8, 2022 between SMART TD and management, the following day SMART-TD would be allowed to go on strike unless Congress wields its authority to unilaterally impose an agreement to avoid a shutdown. This was the case back in 1991, when then-President George H. W. Bush signed the legislation. Since 1963, the legislative branch has intervened to avert at least 11 strikes fraught with serious disruptions to the economy.

The other large union - Members of the Brotherhood of Locomotive Engineers and Trainmen - opted to take the tentative deal.

Looming Disaster

Back in September, the Joe Biden administration averted a strike when it brokered a tentative last-minute deal between rail worker unions and freight rail companies, avoiding a potentially disastrous shutdown. The deal included previously agreed wage increases, such as a 24 percent compounded increase in pay over five years, applied retroactively to 2020, and an annual $1,000 bonus over the next five years. As for sick leave, currently, rail workers are allotted zero guaranteed sick days, paid or unpaid. So the unions were haggling to gain 15 days of paid sick leave, but were unable to secure that concession. In line with the Biden-brokered deal, they were to be allowed to attend preventive medical care and were not to be punished for using unpaid leave for medical procedures or emergencies.

To date, eight of the 12 rail unions are reported to have ratified agreements with the railroads. But if just one union does not ratify the agreement, opting to strike, then all rail workers would be expected to walk out.

“Let’s be clear, if the remaining unions do not accept an agreement, Congress should be prepared to act and avoid a disastrous $2 billion a day hit to our economy,” the Association of American Railroads' (AAR) president and CEO, Ian Jefferies, said in a statement.

According to data from the Surface Transportation Board (STB), US railroads have culled their workforce by 45,000 (29 percent) in the past six years, in line with the more “profitable” operating model dubbed Precision Scheduled Railroading (PSR).

While the largest US freight rail companies, such as CSX, Kansas City Southern, Norfolk Southern, Union Pacific, and the Warren Buffett-owned BNSF, have been raking in larger profits, recent analysis cited by media reports has showed, increasing by a third over the past decade, workers have complained of “fatigue, injury, and burnout.”

When Biden and his team managed to defuse looming sweeping economic disruption in September, just under two months before the November midterms, the hassle to achieve the tentative deal was described as a “nightmare” by one cited House Democrat.

Throughout his campaign for the Oval Office, Joe Biden pledged that he would be the most pro-union president in US history. He underscored this during his first campaign rally in 2019, in Pittsburgh, advocating using trains as a “sustainable alternative” to roads and aviation. The Democrat also vowed he would incorporate the ambitious plans of a “Second Great Railroad Revolution” into his “net-zero” economy pledge. But what American voters are currently witnessing on a daily basis is inflation stubbornly hovering close to four-decade highs, with the US Federal Reserve hiking up interest rates as prices skyrocket.

Fallout from a railroad strike, analysts cited by media outlets across the country warn, would deliver a shock to the economy and leave the administration's policy credibility taking another hit, with Joe Biden's job approval rating sinking ever lower.