When last we discussed employer greed labor problems in the rail industry, President Joe “the most labor-friendly President in American history” Biden had heroically led the cavalry to the rescue ushering in a last-minute deal between the rail unions and the robber barons rail carriers, and avoiding a nation-wide strike that would have crippled the economy along with any hopes the Democrats had of not being decimated in the mid-term elections.
Although the deal included a substantial 24 percent pay increase by 2024 and some protections against the strict attendance policies employed by the railroads, it did not provide any paid sick days, which was the main goal of the rail workers — especially after working through the pandemic. And for the first time, workers would be able to take time off when they are hospitalized or to attend three routine doctor’s appointments a year without being assessed disciplinary points, but the time off was unpaid or they must use vacation time. The agreement also does little to resolve the scheduling issues that make it impossible for many rail workers to plan their lives.
Consequently, three of the five largest rail unions rejected a tentative contract.
With Friends Like These…
Here we are a mere two and a half months later. The Dems pulled a rabbit out of a hat in the mid-term elections. But now, after saving American democracy in the mid-terms, the most labor friendly President in American history is threatening democracy in the workplace. Last night, Biden called on Congress to “immediately” pass legislation to avert a rail shutdown by imposing a tentative agreement approved by labor and management negotiators in September — even though rail workers rejected the Tentative Agreement that failed to satisfy rail workers unreasonable request for a few sick days and less unpredictable schedules.
There are 12 rail unions and around 115,000 rail workers in the country. The 57,000 member Brotherhood of Locomotive Engineers and Trainmen (BLET) membership narrowly ratified the tentative agreement, while the Sheet Metal, Air, Rail and Transportation Workers transportation division (SMART-TD), which represents 28,000 conductors, brakemen, yardmen and others narrowly rejected it, joining the Maintenance-of-Way, Signal Maintainers, and Boilermakers. Even though some of the unions voted to approve the tentative agreement, if one union decides to strike, all of the unions will honor the picket lines. Some Amtrak and commuter rail systems that operate on tracks owned by the freight railroads would also cease operations.
House Speaker Nancy Pelosi soon followed with a statement that the House would consider a bill adopting the Tentative Agreement that several unions had voted down. The Chamber of Commerce and hundreds of business groups have sent a letter to Congressional leaders calling on them to intervene to avoid “certain economic destruction.”
Of course, not all legislators are taking management’s side. Congressman Jamal Bowman (D-NY) tweeted that he cannot “in good conscience vote for a bill that doesn’t give rail workers the paid leave they deserve” and “If Congress is going to force rail workers to only have 3 scheduled unpaid sick days per year, I think every congressperson should start the 118th Congress with 3 unpaid sick days that have to scheduled 30 days in advance.” Several others have declared their intention to vote against imposing the Tentative Agreement.
“If Congress is going to force rail workers to only have 3 scheduled unpaid sick days per year, I think every congressperson should start the 118th Congress with 3 unpaid sick days that have to scheduled 30 days in advance.” — Rep Jamal Bowman (D-NY)
A strike could begin on December 8 or 9, although the rail operators may choose to lock out the unions before they go on strike.
There’s no doubt that a nation-wide rail strike would be a big deal:
Federal data shows that railways transported about 28 percent of U.S. freight before the pandemic, including key industrial commodities like coal, lumber, ore and chemicals, making them the second-largest mode of freight transport, behind trucking, which is about 40 percent. Freight rail carriers are also important in moving automobiles and their components.
The American Trucking Associations, an industry group, wrote in September that the country would need more than 460,000 additional long-haul trucks each day if the nation’s freight rails shut down. The group said such a large shift toward trucking would be impossible because the industry lacked sufficient equipment and faced a shortage of tens of thousands of drivers.
The Association of American Railroads, representing the rail carriers, is terrorizing the media and Congress into action by warning that a strike could lead to $2 billion a day in lost economic output, poisoned water, food shortages and lost jobs. The Anderson Economic Group, on the other hand, estimates that a freight rail strike could cost the US economy $1 billion in its first week (meaning that rail workers could stay off the job for 40 weeks before the US economy loses as much as Elon Musk is going to lose when Twitter goes under). Anderson calls the Railroads’ $2 billion/day estimate “a gross exaggeration.”
Framing the Issue
We’re going to see a lot more news in the coming days about the impending strike, looming economic catastrophe and Congressional action to avert it. But as we’ve tried before, it’s important to look beyond the patriotic, mom-and-apple-pie rhetoric about saving the American economy from catastrophe, and frame the issue from the perspective of rail workers.
A “Labor” Dispute?
The fight over better working conditions for rail workers is being characterized as a “labor dispute,” as if it’s just those troublesome workers and labor bosses holding the country hostage for a few more bucks. But the fact is that this is not a “labor” problem, it’s a greedy management problem.
The Carriers maintain that capital investment and risk are the reasons for their profits, not any contributions by labor.
No one characterized the problem better than the rail carriers themselves who infamously told the Presidential Emergency Board that
The Carriers maintain that capital investment and risk are the reasons for their profits, not any contributions by labor. The Carriers further argue that there is no correlation historically between high profits and higher compensation, either in the freight rail industry or more generally. To the contrary, one of the Carriers’ experts maintained that the most profitable companies are not those whose compensation is the highest. The Carriers assert that since employees have been fairly and adequately paid for their efforts and do not share in the downside risks if the operations are less profitable, then they have no claim to share in the upside either. [Emphasis added]
Greedy Workers?
We have already discussed here how rail workers are treated as second-class human beings. (And more here.) This dispute is not just about the money, it’s about scheduling and burnout which are destroying the lives of rail workers. It’s about rail workers being held hostage by rail companies who yearn for the robber-baron days of yesteryear. It’s about rail companies who have increased their profits implementing a system called “precision scheduled railroading,” which is drastically reducing the number of rail employees to the point where there is no cushion for labor shortages or even illness.
And it’s a safety issue. It can’t be good for rail workers — who are responsible for miles-long trains full of explosive and hazardous materials — to come work sick, fatigued and pissed off. (We have seen the results of understaffed, under-maintained trains.)
Even the National Association of Chemical Distributors — justifiably concerned about the distribution of their chemicals — has called on the rail industry to respect workers’ concerns:
A fragile and volatile supply chain requires a strong rail network. Now is not the time to deny reasonable benefits for a labor community that has been decimated by losses in recent years. Nor is it the time to continue down a path of a PSR system that stretches workers while lining the pockets of executives and shareholders.
It’s time for the freight rail industry to right this wrong and get rail back on track.
You can listen here to the heartbreaking testimony of rail workers explaining why they voted “no” to the Tentative Agreement.
Reneging on an Agreement?
We’ve discussed before how rail workers are treated as second-class citizens without the same bargaining rights that other private sector workers have. Rail workers are covered by a different labor law — the Railway Labor Act of 1926 — which gives the President the power to block a strike by naming a board to try to come up with a compromise labor contract, and gives Congress the authority to intervene in the case of a railway strike and impose a contract.
In fact, the President did appoint a Board which issued a report that recommended pay increases, but ignored the scheduling issue and sick-leave issues, assuming that the pay increases would take care of the problems and any other issues can be handled through the grievance process. Big mistake.
Now that several unions have voted down the tentative agreement, the theme pushed by the rail industry, Chamber of Commerce, the White House and many in Congress is that we had a perfectly decent contract that everyone had agreed to in good faith and now those damn workers have changed their minds.
The White House statement reads that
This agreement was approved by labor and management negotiators in September. On the day that it was announced, labor leaders, business leaders, and elected officials all hailed it as a fair resolution of the dispute between the hard-working men and women of the rail freight unions and the companies in that industry.
But the fact is that this was a tentative agreement, agreed to by negotiators (not workers), and subject to ratification by rail workers.
Biden claims that he shares “workers’ concern about the inability to take leave to recover from illness or care for a sick family member. No one should have to choose between their job and their health – or the health of their children.” and that “As a proud pro-labor President, I am reluctant to override the ratification procedures and the views of those who voted against the agreement.”
Pelosi also understands what’s going on:
“As we consider Congressional action, we must recognize that railroads have been selling out to Wall Street to boost their bottom lines, making obscene profits while demanding more and more from railroad workers. We are reluctant to bypass the standard ratification process for the Tentative Agreement.”
Yes, they’re reluctant, but not too reluctant. But nice rhetoric.
(Labor negotiations would be so easy if it wasn’t for those damn workers.)
Despite his “reluctance,” Biden concludes that “However well-intentioned, any changes [to the Tentative Agreement] would risk delay and a debilitating shutdown. The agreement was reached in good faith by both sides.” (“Tentative” agreement, he means.)
And despite her “reluctance,” Pelosi says that “we must act to prevent a catastrophic nationwide rail strike, which would grind our economy to a halt. Our entire nation would suffer.”
The President and Congress have options other than just imposing the Tentative Agreement that the unions rejected. The Rail Labor Act not only gives Congress the power to impose a contract, but also to “extend a cooling-off period, allowing parties to continue negotiating until they reach an agreement, or force both sides to enter arbitration, where a third-party mediator gets involved.”
Biden and Pelosi could have put their money where their hearts allegedly are by calling on Congress to pass legislation that would have imposed an agreement expanding workers’ sick leave and addressing the scheduling issues
And if they still choose to impose a contract, there is nothing in the Rail Labor Act that obligates Congress to impose the exact terms of Tentative Agreement. Biden and Pelosi could have put their money where their hearts allegedly are by calling on Congress to pass legislation that would impose a contract expanding workers’ sick leave and addressing the scheduling issues. Providing more sick leave and flexibility in scheduling would barely dent the rail carriers’ record-breaking $20 billion in profits. Labor reporter Tim Noah points out that in 2019, railroads were the most profitable industry sector in America.
Since 2004, railroad profits have increased 676 percent and railroad stock prices have increased 1,250 percent. This is the sort of return more commonly associated with criminal enterprises. “Profit margins can’t rise further,” wrote Bloomberg Opinion columnist Thomas Black last month, “without inflicting even more damage on customers and workers.” That was Bloomberg Opinion talking, not the Daily Worker.
So cry me a river.
Small wonder that Democrats are losing working class support. One observer warned Democrats that Biden’s action “just gift-wrapped an opportunity for wealthy Republican creeps to cosplay as the ‘working class party’ again.” Indeed, even working class hero Marco Rubio (R-FL) is supporting the rail workers.
Ironically, Republicans seem to understand this flexibility in the Rail Act better than Dems. Senators Richard Burr (R-NC) and Roger Wicker (R-MS) don’t feel hemmed in by the Tentative Agreement. Instead, they are proposing legislation that would adopt the original (and far worse) recommendations of the Presidential Review Board that failed to deal with scheduling issues at all. In fact, some unions are said to be quietly supporting quick Congressional imposition of the Tentative Agreement before a new, Republican-controlled House makes it difficult to stop the imposition of even worse terms as Burr and Wicker are proposing.
Who Are We?
Ultimately, of course, we wouldn’t be in this sorry situation if we we had a national paid sick leave law in this country so that the clear lack of this obvious basic human right doesn’t threaten to bring down the entire U.S. economy on our heads. A big thank you Joe Manchin and Kyrsten Sinema for that.
“We should remember what this fight is really about: the persistent difficulty some large corporations have in understanding that their workers are human beings, and not just one more piece of machinery.” — Terri Gerstein and Jenny Hunter
The rail carriers may win this battle, but is this really a sustainable model for the American economy — or for the American soul? How long is this country going to be held hostage by a bunch of power-hungry greedheads who value obscene profits over lives?
As Terri Gerstein and Jenny Hunter wrote shortly after the Tentative Agreement was reached: “We should remember what this fight is really about: the persistent difficulty some large corporations have in understanding that their workers are human beings, and not just one more piece of machinery.“
Great article. Thanks for informing us about the issues in this labor-management struggle. I will distribute this widely in my AFT local. PSC-CUNY
We talk about “power-hungry greedheads who value obscene profits over lives” and “robber barons.”
What is driving those obscene profits? Is it a relative few robber barons? The problem is much more complex. Look at who owns Union Pacific…
money.cnn.com/quote/shareholders/shareholders.html?symb=UNP&subView=institutional#:~:text=Top%2010%20Owners%20of%20Union%20Pacific%20Corp&text=The%20Vanguard%20Group%2C%20Inc.&text=SSgA%20Funds%20Management%2C%20Inc.&text=TCI%20Fund%20Management%20Ltd.
How many people out there have IRA’s and 401K’s with the Vanguard Group? How many of those people, when they see their accounts growing, think to themselves, “Gee, I wonder if some railroad worker gave up his job, a raise, or is paying more for health insurance this year for my gain?”
A LOT of people, even upper middle class with fat retirement accounts, have gotten rich off the backs of workers in all industries who lost their jobs and pay raises to support “shareholder value.” These executives are simply doing what they get paid to do…make shareholders money. If they ARE robber barons, they are on the behalf of all shareholders…not just their personal greed. And if they don’t make shareholders money, they will be on the street and replaced by somebody who will. As Ice T said, Don’t Hate the Playa, Hate the Game.” The system today is all about squeezing the value out of companies to give shareholders. Some of these “record profits” are simply a matter of gutting the house and robbing Peter to pay Paul. Anyone investing in the stock market is potentially benefitting. It’s not just a few “power-hungry greedheads.” It’s everyone playing the game.
Yes anyone who owns stock is ” part of the game”. And they should do what they can to change it like shareholder policy proposals. Of course the usually don’t go far because of who holds the voting blocs. Most corporations these days have much tighter constraints on their shareholder meetings. But let us be aware of the game. First the holdings lots of individuals have were not chosen by them but by the folks who set up the plans (their employers). But more importantly although lots of people own some shares, they are a very small part of the company’s share holder value, whereas stock incentives and share buy backs are the primary means by which the corporate executives are over compensated. And their friends from other corporations who sit on their boards routinely approve these plans. And whether they screw up or not there is a parachute provided to ease them into another position.
So, who precisely is “the railroad company?” At what level in an organization do we say someone is no longer a representative of the power-hungry greed machine and a victim of the system?
Companies are just a pile of money and everyone is trying to get a piece. The mid-level manager undermining all of his peers to get the best bonus in the department may be just as power-hungry and greedy, if not more so, than some CEO’s. There are power-hungry greedheads and people who don’t care about other people at every level of organizations. With at will employment, one’s mid-level boss is every bit as much of a threat to one’s employment as the CEO.
Villifying senior management of private industry is like saying that anyone in a politically-appointed position in DC must be a power-hungry greedhead. Of course, that’s not true. Many of us who have been in senior positions have felt the frustration of being told by our employees that “we don’t care” when we really did…and we wished so much we could help them see we did, but could not. It’s no fun. I did not like being told I didn’t care, so I am not going to judge ANYONE simply because of their position in a company and how much money they make…someone we do not know the first thing about on a personal level. I’ve got far too many faults of my own to spend time working on and ways I can, on a personal level, make the lives of my employees better on a daily basis. People who live in glass houses should not cast stones…especially those making outrageous salaries in the public sector.
The article on the rail dispute closes with this quote “…the persistent difficulty some large corporations have in understanding that their workers are human beings, and not just one more piece of machinery.” However, the article itself makes it amply clear that the rail companies have no interest in seeing their employees as human beings – that would interfere with their profits.