Rail strike threat recedes as Congress prepares to impose unpopular contract on unions

By Chris Isidore, CNN Business amp.cnn.com

The threat of a freight railroad strike that had been building in recent weeks receded quickly after President Joe Biden and Democratic leaders in Congress agreed late Monday to support legislation that would block a walk-out by more than 100,000 union members set for the end of next week. 

The move relieved business groups, which had been growing increasingly concerned about the threat posed by 30% of the nation’s freight movements grinding to a halt. More than 400 business groups had joined to plead with Congressional leaders on Monday for quick action

A strike, set for December 9, would have snarled still-struggling supply chains and caused shortages and a spike in prices gasoline, food, automobiles and other goods, causing a body blow for the economy that many fear is already at risk of tipping into a recession. A week-long strike could cost the economy $1 billion, according to an estimate from Anderson Economic Group. The White House estimated that as many as 765,000 workers could temporarily be out of work within two weeks if the rail workers went on strike.

Biden and Democrats had been unwilling to block a strike in September when negotiations were nearing a previous strike deadline. As another strike deadline approaches, they felt there was no choice but to act.

The move is sure to anger union rank-and-file who had rejected labor deals that their leaders reached earlier this fall. 

The unions had argued they needed the threat of a strike in order to win changes in the tentative agreements that members had rejected, including paid sick days provisions missing from the current contracts. They argued that the railroads, many of which reported record profits last year and are on their way to new earnings records this year, could afford to meet union demands. They argued railroads were refusing to negotiate in good faith in hopes that Congress would step in and give them what they wanted.

Biden’s statement Monday night suggested that railroad strategy had worked.

“During the ratification votes, the Secretaries of Labor, Agriculture, and Transportation have been in regular touch with labor leaders and management. They believe that there is no path to resolve the dispute at the bargaining table and have recommended that we seek Congressional action,” he said. “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.”

Biden and House Speaker Nancy Pelosi both said that Congress should impose the terms of the tentative contract rejected by four of the 12 rail unions. While the other eight unions had ratified the deals, sometimes by narrow margins, they had been prepared to honor the picket lines of any union that went on strike, meaning the railroads would have ground to a halt even if one union walked off the job.

Still a win for labor

The fact that Congress will move to impose the rejected tentative deals could be considered a limited victory for the unions: Congress could have instead voted to impose contracts that were worse off for the workers than the ones their members rejected.

Republicans in Congress who had introduced legislation before a September strike deadline to keep workers on the job were looking to impose a contract that would have been worse for union members, one based on recommendations of a panel that had been named this summer to try to reach a deal acceptable to both sides. The unions had been able to negotiate improvements in that proposal at the negotiating table in September.

But at least one of the unions that had rejected the deal, the Brotherhood of Maintenance of Way Employes Division [BMWED] that represents more than 20,000 track maintenance workers, said earlier that if Congress did impose a contract, it should include union demands for paid sick days.

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