The House passed legislation that has been the main contention among the railroad union and the government. In a 290-137 the house has promised an increase in railroad worker salaries of 24% spread out over 4 years. Also included in the deal is a guaranteed immediate payout of up to $11,000 and an extra paid vacation day. In a separate vote that ended 221-207, the House guaranteed 7 days of sick pay for workers instead of the proposed 1 day. As it currently stands, rail workers are guaranteed 0 paid sick days.
This resolution has likely prevented catastrophe as rail workers were ready to go on strike if they did not receive some sort of agreement from the government. The strike would likely have caused supply chain issues that would equate to nearly $2 billion a day for the economy. The rail unions have given the legislature until Dec. 9th to reach some agreement, otherwise the strike would happen.
One particularly interesting part of the threatened shutdown is the actual threat itself. The simple act of threatening a shutdown can have major effects. The actual process of going on strike begins 5-7 days before the actual shutdown date. On the first day, hazardous materials are no longer being shipped, on the second day, railyard prep begins and long distance trains are sent out for the last time. The third day comes with trains stopping at consumer locations and not leaving, on the last day the last trains leave the station, and then finally, no more trains take shipments from the railyards.
The threat had scared many producers that use trains as shipment. The two biggest however were fertilizer producers and farmers. Since many fertilizers fall under the hazardous materials and chemicals umbrella, they would see the immediate effects before the actual shutdown. The 4 major US railways move roughly 80% of all agricultural product in the US.
The bill now moves to the Senate where Chuck Schumer has promised speedy passage.
https://www.cnbc.com/2022/11/30/rail-strike-house-approves-tentative-labor-deal.html
Yeah. The strike would definitely affect the economy. I really hope the house of representative and the government could align to their offer, before December 9th.
ReplyDeleteI'm initially shocked by the fact that railroad employees have no guaranteed sick days, but I imagine a number of companies implement better working standards than are federally mandated. It is impressive that even the threat of a strike could cause the House to prioritize a bill, but when you consider the economic impact 80% of agricultural products would have on the US, it's no wonder. This is a clear example of the close relationship economics has with politics.
ReplyDeleteDr. Gitter has brought up the ongoing issue with railroad workers in our Labor Economics course this semester. The workers are expected to be on call whenever they are not on shift and face other unfair treatments. With railroads still being a major factor in the supply chain, the workers know they have the power with threatening a strike. Ideally, a resolution would be reached soon.
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