The clock is ticking for President Joe Biden to decide what to do about a coming labor showdown that could see more than 100,000 rail workers going on strike.
After more than two years of negotiations, railroads and the unions representing rail workers are at a stalemate over compensation and benefits related to their contracts. That impasse is expected to come to a head on Monday, when the deadline for negotiations comes and workers could begin going on strike.
Mass strikes or a lockout would be disastrous for the economy right now, given the country’s historic inflation and persistent problems with supply chains. Consumer prices increased at a blistering 9.1% annual pace for the month of June, and inflation as measured by producer wholesale prices also ticked up to a smoldering 11.3% for the year ending in June.
Biden could take the gun out of labor’s hands and choose to name a board of arbitrators to review the contract dispute — doing so would cause any strike or lockout to be delayed by 60 days under federal law, buying negotiators and the administration some time to resolve the situation.
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Biden, who has touted himself as a champion of organized labor, is being put in a tough position because he doesn’t want to alienate union workers — whose votes are crucial in Rust Belt swing states like Ohio, Pennsylvania, and Michigan — but is also facing his biggest political challenge yet in containing high inflation, which would doubtlessly be worsened by supply chains fraying even further.
The president is feeling pressure from business interests to act and prevent disruptions to shipping.
In a letter to the White House earlier this month, U.S. Chamber President Suzanne Clark urged Biden to appoint a board and said it is “imperative that the administration act to prevent any disruption to America’s rail service.”
“Any breakdown would be disastrous for U.S. consumers and the economy, and potentially return us to the historic supply chain challenges during the depths of the pandemic,” she said, later adding that the “administration’s next steps will be critical in this regard.”
The National Association of Manufacturers is also urging the White House to intervene in the situation.
“With Class I railroads and their labor unions recently ending a mediation process in their negotiations, manufacturers respectfully request that you work with industry and labor to avoid any disruptions to U.S. freight rail operations,” a July letter to Biden read. “We encourage both sides to resolve their differences directly, but if that does not occur, we respectfully ask that you do all in your power to keep freight rail moving—for manufacturers and for the American people.”
Thousands of workers have already voted in internal union elections to strike should Biden not act by the deadline, according to the Financial Times. The Brotherhood of Locomotive Engineers and Trainmen said that 99% of its members would support a strike should a deal not be made.
The freight workers argue that there are major issues with understaffing and that they are being overworked to keep the country’s goods flowing. In 2020, some 28% of freight movement in the U.S. was by freight rail, according to Union Pacific.
A report from the federal Surface Transportation Board earlier this year found that the biggest rail carrier slashed about 45,000 positions over the past six years. The last time there was a rail strike, in 1992, it lasted two days but cost some $50 million each day.
Jeremy Ferguson, president of the Sheet Metal, Air, Rail and Transportation Workers — Transportation Division union, told ABC News that conductors are upset they haven’t gotten a pay bump since 2019, as contract negotiations dragged on during the pandemic, which was a difficult time for many essential workers.
“With a stale contract that has been in effect since prior to inflation taking hold, the workers have nothing to show for their blood, sweat, and tears, as well as the sacrifices they and their families have made,” Ferguson said.
It is likely that Biden will assemble the board to help work the situation out and avoid a strike, at least for the next 60 days, according to Greg Regan, president of the Transportation Trades Department at the AFL-CIO.
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“I expect within the next couple of days, the President will issue an executive order establishing a Presidential Emergency Board (PEB) which will prevent any work action from the railroads or the union,” Regan said.
The Washington Examiner contacted the White House for comment.
