Biden Hits the Brakes on Possible Railroad Strike

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President Biden’s call on Monday for Congress to intervene in contract negotiations between railroad workers  and the industry to prevent a strike is premature. There is still time for the rail companies and their unions to reach deal on their own without the government intervening.

It’s a telling move though. “Blue collar Joe” Biden’s support for organized labor has its limits, and those limits include when the union’s actions threaten the broader economy and might embarrass his administration.

The business community, organized labor, and Washington are all waiting with baited breath to see if the three remaining railway worker unions will go along with the eight other unions that signed on to a new contract with rail industry. If the unions and management can’t reach a deal by the current deadline of December 8, a strike is likely; that could grind the railways to a halt and threaten a repeat of last year’s supply chain crisis.

Reuters reports that a rail shutdown could freeze nearly 30 percent of U.S. cargo shipments, costing the economy $2 billion per day by effectively halting the shipments that fuel the energy, agriculture, manufacturing, health care, and retail sectors. Biden himself warned that “a rail shutdown would devastate our economy.”

It’s particularly awkward for Biden because he made a point earlier this year of claiming that he had stepped in and resolved the dispute before it became a problem. He created a Presidential Emergency Board (PEB) in July to study the crisis and recommend a compromise contract. The industry has signed onto the PEB’s proposal, as have eight unions.

The terms of the contract are pretty good for the workers. It provides a 24 percent wage increase through 2024, with another 14 percent wage increase effective immediately. That would put the average pay for a rail worker at $110,000 per year by the end of the agreement, not counting benefits.

The three holdout unions want more sick time, arguing that they were stretched thin by the COVID-19 pandemic. The request would require the industry to hire more workers. This comes at a time when the unions have been fighting to prevent further automation by the industry.

Biden officially told the holdouts Monday that they’re not getting anything extra, calling on Congress to adopt the PEB proposal “without any modifications.” It’s good that the administration, which had previously portrayed itself as a union ally, is laying down some limits.

Yet the administration is drawing the line at the one place where both sides could use some wiggle room. It’s a common negotiating tactic to push things to the absolute last minute in the hopes of getting them best deal that you can. That may be all that is happening here. The administration should at least wait until a strike is a near-certainty before asking Congress to act.