A rail strike could wreak havoc on the US economy by crippling supply chains. The National Retail Federation says this is the worst possible time for a strike to happen.

President Joe Biden and Speaker Nancy Pelosi are moving to prevent a looming shutdown of the nation’s freight railroads. The House is preparing to take up legislation this week to impose a settlement over the objections of some unions.

Biden said in a statement Monday that lawmakers should “immediately” codify the agreement he helped broker in September between unions and railroads “without any modifications or delay,” after some labor groups voted to reject it.

“We cannot let our strongly held conviction for better outcomes for workers deny workers the benefits of the bargain they reached, and hurl this nation into a devastating rail freight shutdown,” Biden said.

Biden’s intervention underscores the administration’s growing concern about the possibility of a work stoppage on freight rail lines. A strike could wreak havoc on the United States economy by crippling supply chains, disrupting passenger rail travel and preventing key materials from reaching water treatment plants.

Rail strike impacts retail in key holiday period

A rail strike would be devastating to the economy, National Retail Federation President and CEO Matthew Shay said Nov. 29 on a media call about Thanksgiving weekend shopping.

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“It would be devastating for our economy at a time like this to see any stoppage in the shipment of goods by rail. We rely on that,” Shay said. “It would cost our economy billions of dollars a day. It’s the worst possible time for this to happen.”

Many retailers already possess their merchandise for the holiday season. Still, they would still feel the rail strike’s impact, Shay said.

“Any slowdown, any stoppage, any delays and backlogs are going to have a ripple effect and put more pressure on those other delivery and distribution sectors, which are already trying to recover from the pandemic. … We’re seeing the supply chain really begin to show recovery in as substantial way, and layering this burden on top of it would really undo a lot of the progress we made over the last year,” Shay said.

Besides the supply chain, any type of disruption from an external factor hurts consumer behavior and spending, Shay said.

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Unions and railroads have until Dec. 9 to avoid a strike, and a negotiated agreement now appears unlikely.

9 labor agreements ratified, 4 struck down

Of a total of 13 labor agreements among the 12 unions representing different types of rail workers, nine have been ratified and four were struck down by members. Tensions rose after the largest union representing about 28,000 workers, mostly conductors, voted it down, with 51% against, in results released on Nov. 21.

Congress can intervene to stop a strike under federal law. Pelosi said the House would consider legislation this week to adopt the tentative September agreement.

“This week, the House will take up a bill adopting the tentative agreement — with no poison pills or changes to the negotiated terms — and send it to the Senate,” Pelosi said in a statement. “It is my hope that this necessary, strike-averting legislation will earn a strongly bipartisan vote, giving America’s families confidence in our commitment to protecting their financial futures.”

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Freight rail companies urge Congress to act quickly

“No one benefits from a rail work stoppage,” said Association of American Railroads President and CEO Ian Jefferies. “Not our customers, not rail employees and not the American economy. Now is the appropriate time for Congress to pass legislation to implement the agreements already ratified by eight of the 12 unions.”

The September agreement, though, does not include sick leave, a key issue for freight-rail workers. They have sought to guarantee medical time off and other benefits.

Tony Cardwell, president of the Brotherhood of Maintenance of Way Employes, said he would oppose any legislation that doesn’t include paid sick days. BMWED was one of four unions that voted down the proposed agreement. Cardwell said he would stand by his members.

“When Biden makes the claim that he’s pro-union — and I believe that to be true — and Democrats campaign on it, they better deliver,” Cardwell said. “If we’re not going to get it, then they shouldn’t intervene.”

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The threat of congressional intervention already robbed unions of leverage, Cardwell said. Freight-rail carriers last week turned down the union’s latest offer of four paid sick days. That’s down from the initial request of 15 — knowing Congress would step in, he said.

Cardwell said he had been on the phone all day trying to shore up support for paid sick days in the forthcoming legislation.

“My move is to fight like hell,” Cardwell said.

White House response to deal terms

Pelosi in her statement praised the September deal for “including a 24% raise, no changes in copays, deductibles or coinsurance costs, some time off for routine, preventative and emergency medical care.” But she said Democrats would continue to “fight for more of railroad workers’ priorities, including paid sick leave.”

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The White House signaled earlier Nov. 28 it would not let a shutdown of freight rail lines cripple the economy, with a spokeswoman noting that Congress has repeatedly intervened in the past to prevent work stoppages.

“The president is directly involved in the process and has been engaged with his team and also has had conversations with members of Congress on this particular issue, in case resolving the issue falls to them as it has 18 times in the last 60 years,” White House Press Secretary Karine Jean-Pierre said.

Congressional action to stop a strike isn’t a foregone conclusion. Legislation could run into objections from progressive Democrats because unions, a powerful Democratic constituency, oppose it. Senate procedures are more complicated. Getting a bill passed by the deadline would probably require all 100 members to agree on holding a quick vote.

Elected officials weigh in on rail strike

Senator Bernie Sanders, an independent from Vermont, said he would support a rail strike bill if it guarantees sick leave benefits.

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“Our fight has got to be that workers in that industry are treated like human beings and get guaranteed sick leave,” Sanders said. “That’s what I’m going to fight for.”

The Senate Commerce Committee’s top Republican, Roger Wicker of Mississippi, said Congress must pass legislation to avert the strike.

“The president says he is going to ask Congress to act and I would expect Congress to support that request,” he said earlier Monday, predicting that lawmakers would act before the Dec. 9 deadline.

However, Senate Finance Committee Chairman Ron Wyden, an Oregon Democrat, said a bill on the rail strike has been discussed. But he said it would be a “challenge” to get it done by the deadline.

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