A potentially catastrophic national rail strike that could have cost the U.S. economy $2 billion daily was narrowly avoided as the Senate followed the House in passing a bill to resolve the standoff between railroad labor unions and management. President Biden signed the legislation into law today.
The crisis stemmed from several rail unions refusing to ratify a tentative agreement proposed by the Presidential Emergency Board (PEB). Before signing the bill, President Biden acknowledged the difficult decision: "I want to thank Congress — Democrats and Republicans — for acting so quickly. This was a tough vote for members of both parties, and for me as well. But it was the right thing to do to save jobs, protect working families from harm and disruption, and maintain stable supply chains during the holiday season."
The Agreement Terms
The legislation implements terms based on recommendations from the Biden-appointed PEB issued on August 16. Key provisions include:
- 24% wage increases over five years (2020-2024)
- An immediate 14.1% wage hike
- Five annual $1,000 lump-sum payments
The National Carriers' Conference Committee (NCCC), which represents freight railroads in national collective bargaining, noted that some retroactive payments would be disbursed immediately upon union ratification.
Outstanding Disputes
The primary disagreements between holdout unions and freight railroads centered on sick leave, scheduling, and staffing shortages. When the House passed the bill, 8 of 12 rail labor groups had fully ratified the tentative agreement, with 9 of 13 contracts approved (SMART-TD had two separate contracts). The remaining unions included:
- Brotherhood of Railroad Signalmen (BRS)
- SMART-TD (for one of its contracts)
- Brotherhood of Maintenance of Way Employes Division (BMWED)
- International Brotherhood of Boilermakers (IBB)
Legislative Timeline
With the December 9 deadline approaching, the House passed H.J. Res. 100 on November 30 to resolve the impasse. The Senate subsequently approved the measure to implement the PEB's terms. A companion resolution (H. Con. Res. 119) proposing seven annual paid sick days for rail employees failed in the Senate.
Industry Response
The Association of American Railroads (AAR) strongly supported the Senate's action. AAR President and CEO Ian Jefferies stated: "No party achieved everything they advocated for, but the result provides substantial gains for rail employees. The agreement maintains rail transportation's position among America's best jobs."
AAR highlighted the agreement's benefits:
- Average immediate payout of $16,000 upon ratification
- $5,000 performance bonuses
- Maintenance of premium healthcare coverage
- Additional paid personal leave days
- Improved scheduling predictability
Jefferies noted the contract represents the largest wage increase in over fifty years, with average compensation reaching approximately $160,000 by 2024. He emphasized that employee healthcare contributions remain significantly lower than other industries, placing rail workers in the top 10% of U.S. earners.
Economic Implications
AAR's September report warned that a strike could have cost the U.S. economy $2 billion daily. The NCCC, which represents freight railroads in collective bargaining, expressed relief that uninterrupted service would continue through the holiday season and beyond.
The NCCC stated: "We value our employees' critical contributions and will use these agreements as a foundation for further collaboration to enhance rail careers, safety, and efficient freight transportation. We recognize concerns about paid leave benefits and will address these in future negotiations."