US House passes bill to avoid rail worker strike

Railroad workers have expressed concerns over unpredictable and punishing schedules, a lack of sick leave and extended periods of on-call time. Some of the 12 unions involved in contract negotiations rejected a deal brokered in September and threatened to strike. At President Biden’s urging, Congress has stepped in and is working to reach a labor agreement. On Wednesday, the U.S. House passed a bill that would bind companies and workers to accept an agreement reached in September. We learn more about this issue from Peter Goodman, a New York Times global economic correspondent and author of “Davos Man: How the Billionaires Devoured the World.”

Note: This transcript was computer generated and edited by a volunteer.

Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. The clock is ticking. The first rail strike in more than a generation could happen in just nine days without congressional action. That’s why President Biden is urging Congress to pass a bill to enshrine an earlier agreement between rail worker unions and railroad owners into law. Meanwhile, many of those unions vehemently oppose that agreement. Joining us now to talk about what’s at stake in this debate is Peter Goodman. He is a global economic correspondent for the New York Times, and the author of “Davos Man: How the Billionaires Devoured the World.” Welcome back to the show.

Peter Goodman: Thanks for having me.

Miller: I want to start with the big picture here. The last time you were on, we talked about the possibility of a strike at west coast ports, and also the larger issue that really tied to that of supply chain problems. How would you rate the health of global supply chains right now?

Goodman: There’s been a return to some degree of normalcy. Shipping rates are down quite a bit. We no longer have these long lines off the coast of Southern California, though to some extent, that’s because a lot of the shipping in anticipation of a possible dockworker strike has shifted to the east coast of the United States, now we have some lines there.

Rail is still a real mess. Rail companies spent the years running up to the pandemic cutting their workforces by as much as a third. Service has been lost in places that are less profitable. We still have shortages of truck drivers, even as trucking firms are throwing money at anybody willing to be a truck driver, because it’s basically a miserable job that’s been downgraded through deregulation. We don’t have enough people to work in warehouses.

So there’s still a lot of problems, and they move around. But they’re less severe than they were a few months ago.

Miller: Given what you’ve just outlined, what would a rail strike in the US mean for everything you’ve just described?

Goodman: It would potentially be catastrophic. Rail moves something like 40% of the freight through the United States. It moves a lot of really important things, from fertilizer, to lumber, to chemicals that turn into paint and industrial solvents, to crops (both exports, and in some cases imports), moves a lot of meat, moves cars.

But it’s not just restricted to what goes on the rails, because if stuff stops moving on the rails, it’s got to move some other way. And the trucking industry is already dealing with tremendous surges in demand and not enough drivers. And so if we start moving stuff from trains onto the highways, that exacerbates the shortages we’ve already got in trucking. We will see prices go up, that will hit consumers with higher prices. We’ll see shortages of all sorts of things, from equipment that contractors need to finish renovations, to paint, to fertilizers, and so it goes.

Miller: The American Association of Railroads has put out an estimate that I’ve seen in a lot of places, that a nationwide freight railroads shutdown would cost the country more than $2 billion dollars a day. Does that number seem accurate to you?

Goodman: Who knows? You can model these numbers in any which way. That seems potentially like a valid number, but it’s fair to say that the effects would be very large. Rail is a very big piece of our supply chain, and we would feel the effects dramatically.

Miller: I’m curious about the very specific timing here. We’re just about to enter the holiday season, hugely important for families and for many people who celebrate the holidays, but also for bottom lines. There’s a reason that this past Friday was called Black Friday. Would a strike this close to the holiday season have an oversized impact on our economy? Or are the consumer goods that people would be interested in buying largely already in stores?

Goodman: Most of the stuff that consumers care about is already along the way, but not all of it.

And certainly, the timing of this would be very bad for retailers. Again, we would see tie ups on the highways. So even last mile deliveries from warehouses where stuff might have already been acquired months ago, from factories in China and elsewhere in Asia, it would be hard to deliver stuff to people’s doors and to stores. Some of that would be disrupted.

Miller: So that’s what’s at stake in a strike or a shutdown. But let’s turn to how we got here. What is the gulf between railroad worker unions and companies?

Goodman: Well, rail workers are very upset about the fact that they don’t have any paid sick leave. And the railroads will say “well, yes, they do. They have various long term disabilities. If people are sick for a certain number of days then federal programs kick in.” But there’s no guarantee in the contracts that if you are ill or you need to care for a loved one, you can take the day off with pay and stay home, or go to a doctor. And this is a source of enormous grievance. And it’s coupled with this thing called Precision Scheduled Railroading, which is this fancy bit of consulting argot, it’s “just in time” for rails. It’s about cutting paychecks, limiting costs, eliminating service on less profitable routes and handing shareholders of railroads larger dividends and using money to buy back railroad shares, which makes stock prices go up. Because of this, there are fewer people out there doing the work.

I’ve spent a lot of time in the last couple of months talking to these maintenance gangs who roam huge territories. They drive as much as 12 and 13 hours from their homes to go and repair lengths of track. Well there are fewer of these people than there used to be, so it’s harder than ever for these guys to get their days off. I talked to a guy in Tennessee, he worked for Norfolk Southern, which is one of the country’s largest rail systems, who described that back in 2021 his son was born with a heart defect, required heart surgery, and his supervisor, when he was trying to take time off to be home during the surgery said “you’re really putting me in a tough spot, we’re short, we don’t have enough people.” And the final straw for this guy came when the contract ran out, and he’s listening to his bosses simultaneously tout record revenues, the industry is touting record profits, at the same time that they’re saying we can’t afford to pay you any sick leave. And he wrote a resignation letter after 14 years at the railroad and quit.

Large numbers of people are quitting. So for the people who are remaining, it’s tougher than ever. And they’re unhappy about the lack of paid sick leave combined with record profits, the difficult scheduling. Some of the railroads have implemented these draconian attendance policies, where people are actually disciplined if they stay home. If they go to a relative’s funeral, if they’re home for the birth of a child, if they don’t have prior authorization (and oftentimes they can’t get authorization) they’re subject to discipline.

So even though the deal that was brokered by the Biden administration after this so called “Presidential Emergency Board” convened to avert a strike and mediate, even though that deal offered what sounds like a pretty big number - 24% raise over five years - the unions say first of all, if you factor in inflation, it’s actually not a raise. But mostly they say “we’re upset about these attendance policies and the lack of paid sick leave.”

Miller: So that is the deal brokered with the president’s help back in September, that now he’s asking Congress to enshrine into law, a deal that doesn’t include the four paid sick days that unions are asking for.

Goodman: The unions have reduced their ask from fifteen days to four. And that deal brokered in September includes one day of so-called “personal leave,” plus three days of unpaid medical leave that requires prior authorization by the employer to schedule.

Miller: So let’s take a quick step back here. Why is it that Congress could avert a railroad strike? We don’t see congressional action in response to most other labor disputes. What’s different about transportation or rail?

Goodman: This goes all the way back to the 19th century and the robber barons. It really goes back to tremendous social upheaval in the form of rail strikes back in 1877, when things got so, so violent that the the governor of Pennsylvania - whose state held the Pennsylvania Railroad, then the most important railroad in the country - actually brought in the militia from Philadelphia to violently put down strikes in Pittsburgh. Federal forces even got involved. And out of that came this recognition that rail, at least back then, was the crucial way to move goods. It’s special. It has to be really hard for workers to strike. They should have that as recourse. But we’ve got this very convoluted, complex system where there’s various stages of bargaining, mediation, eventually, this Presidential Emergency Board before ultimately workers get the right to strike, with always in the background the idea that Congress can step in and intervene, and impose the terms of a settlement.

A lot of labor experts will say this is now really outdated. This dates back to the time when rail was almost the only means of moving goods through the country, before the creation of the interstate highway system, before the rise of trucking. Well now we do have lots of other ways to move stuff around. And yet rail workers are in this position where any time they’re bargaining for a contract, they’re on the other side of the table from railroads that understand that in their back pocket is the reality that Congress can step in and intervene. It really limits the leverage of the unions.

Miller: I should note that we are talking a little after 10am on Wednesday, and I’m just seeing news that the House has passed legislation to avert this rail strike. So now it’s going to be going to the Senate. And it was a pretty lopsided vote, it was 292-137. What do you see as the politics of this?

I’m particularly curious because I saw a curious statement recently from Republican Florida Senator Marco Rubio, who said “It’s wrong for the Biden administration, which has failed to fight for workers, to ask Congress to impose a deal the workers themselves have rejected.” That sounds more like Bernie Sanders than a standard Republican line. Overall, what do you see as the politics right now?

Goodman: Well I do find that super interesting, especially that Rubio comment. I think it’s a reflection of the fact that labor has gained some leverage coming out of the pandemic. The pandemic has exposed the fact, along with the supply chain disruption that is largely caused by the pandemic, that our supply chain is built on the assumption that large numbers of people will work in conditions that most of us just simply wouldn’t accept; where their wages are not adequate to support the middle class standard of living; where in the middle of a pandemic they can be rendered essential workers, which is another way of making them dispensable human beings. You got to go into a slaughterhouse and work even though there’s no testing, there’s not sufficient protection. We don’t have a transparent understanding of who’s infected and what’s being done to limit infection, but we need you to work because it’s more important that we continue to have beef produced than that we protect your individual health. And the same goes for rail workers, they were also called essential workers. These maintenance gangs were working in towns that were virtually shut down, where they couldn’t even get a steady supply of food, staying in motels that are infested with bedbugs and rats. They continued to do this work because they were deemed essential.

And so when we talk about normalcy, we’re talking about a supply chain that includes a lot of this everyday suffering. And I think that word has gotten out to the point where the politics have changed, such that a Republican like Marco Rubio is now actually concerned that it’s not a good look to just say “We got to keep the supply chains moving. We better focus on the fact that we’re talking about human beings who literally have to choose between their paychecks and their ability to go to the doctor.”

Miller: Having said that, do you see a path for 60 votes in the Senate for a separate House bill that would add seven days of paid sick leave to this deal?

Goodman: No, and I think that that’s known to the political actors who are engaged in this performance. It’s very interesting that the Biden administration took power with this pledge to give everybody in America seven days of paid sick leave.

Miller: And Biden has called himself the most pro-union president in history.

Goodman: Right. I mean, if they were really serious about sick leave, they would have written it into the bill imposing the terms of the settlement itself. Marco Rubio is now on record saying I’m not voting for any settlement to this that doesn’t include paid sick leave. Well, the Democrats didn’t test that and give him that option. If they had actually taken the seven days of paid sick leave and put it into the terms of the settlement that the House has just authorized, that would have forced politicians to actually make a choice between abiding by their pronouncements and delivering paid sick leave, or shutting down the supply chain. Instead, you can see what’s going to happen. They’re gonna avert the strike, the votes seem to be there in the Senate for this bill that’s going to impose these settlement terms. And meanwhile the Democrats will say “look, we really try to deliver seven days of paid sick leave, we had this whole separate bill, but unfortunately we couldn’t get through the Senate.”

And life will go on much as it has. The rail workers will get a raise, they won’t get paid sick leave and we’ll all get to continue to “click here to buy” and stuff will show up at our doors.

Miller: Peter Goodman, thanks for your time.

Goodman: Thank you.

Miller: Peter Goodman is a global economic correspondent for the New York Times and author of “Davos Man: How the Billionaires Devoured the World.”

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