President Joe Biden is urging Congress to act in a bid to avoid a potential railroad strike that may cause further supply chain disruptions and result in a significant economic impact.
Per a recent report from ABC News, Biden, who describes himself as a “proud pro-labor” president, stated that while the decision to urge Congress to act was difficult, the larger economic considerations of a railroad strike were his primary concern.
“I am reluctant to override the ratification procedures and the views of those who voted against the agreement,” Biden said, referencing a railroad labor deal negotiated earlier in the year. “But in this case, where the economic impact of a shutdown would hurt millions of other working people and families, I believe Congress must use its powers to adopt this deal.”
Labor disputes in the railroad industry are governed under the Railway Labor Act (RLA), a federal law enacted in the ‘20s to address labor disputes in an industry considered vital to the U.S. economy. Per the RLA, which also covers the airline industry, if both parties in the dispute do not reach an agreement, employees can strike, or railroads can impose their own work rules, or both, at which point the RLA will no longer set terms.
The last time Congress voted to end a railroad strike was in April of 1991, forcing the parties in the dispute into a 65-day binding arbitration process less than 24 hours after a walkout.
The new tentative agreement between railroad companies and labor was reached in September, and includes a 24-percent compounded wage increase and $5,000 in lump-sum payments. Although labor unions highlighted wage increases, bonuses, no increase to insurance costs, and better time-off policies, four of the 12 rail unions rejected the contract, including the SMART Transportation Division, or SMART-TD, the largest rail union in the nation. Some workers groups cite compensation, working conditions, and paid sick days as sticking points.
If a railroad strike does occur, it’s expected to have a significant impact the U.S. economy. It’s estimated that railroad is responsible for the transportation of 40 percent of long-haul freight in the U.S.