A strike could take place on December 9 as rail companies and labor unions fail to reach an agreement on matters such as health benefits and wage increases. Biden noted in a statement that the majority of the nation’s rail unions have approved a tentative agreement that guarantees a 24% pay raise and asked Congress to adopt the contract.
“I am calling on Congress to pass legislation immediately to adopt the Tentative Agreement between railroad workers and operators – without any modifications or delay – to avert a potentially crippling national rail shutdown,” the president remarked.
“This agreement was approved by labor and management negotiators in September,” Biden continued. “As a proud pro-labor President, I am reluctant to override the ratification procedures and the views of those who voted against the agreement. 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.”
The Railway Labor Act, passed in 1926 as the nation became increasingly reliant upon railways, permits Congress to exercise its authority over interstate commerce by preventing rail strikes.
Biden noted that Labor Secretary Marty Walsh, Transportation Secretary Pete Buttigieg, and Agriculture Secretary Tom Vilsack, who have been in consistent contact with labor unions and rail companies, currently see “no path to resolve the dispute at the bargaining table” and recommended that Congress intervene. The daily economic cost of a nationwide rail shutdown could amount to $2 billion, according to a report from the Association of American Railroads.
“Some in Congress want to modify the deal to either improve it for labor or for management. However well-intentioned, any changes would risk delay and a debilitating shutdown. The agreement was reached in good faith by both sides,” Biden continued. “At this critical moment for our economy, in the holiday season, we cannot let our strongly held conviction for better outcomes for workers deny workers the benefits of the bargain they reached, and hurl this nation into a devastating rail freight shutdown.”
SMART Transportation Division, a union representing rail conductors, announced last week that members rejected the tentative agreement, which would produce the largest wage hike for the industry in four decades. Freight rail accounts for 40% of long-distance shipping volume, according to a report from the Retail Industry Leaders Association, including products such as chemicals used to treat wastewater and ethanol used as a component in gasoline.
More than 400 business groups led by the U.S. Chamber of Commerce likewise asked leaders of both parties to intervene ahead of the holidays, which is a crucial period for many industries.
“No one wins when the railroads stop running. Congress recognized their necessity to interstate commerce and America’s economic health with the passage of the Railway Labor Act and past congressional interventions in rail labor disputes when other steps fail,” the letter said. “While a voluntary agreement with the four holdout unions is the best outcome, the risks to America’s economy and communities simply make a national rail strike unacceptable. Therefore, absent a voluntary agreement, we call on you to take immediate steps to prevent a national rail strike and the certain economic destruction that would follow.”