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Tentative Deal Reached to Avoid US Railroad Strike

    Tentative Deal Reached to Avoid US Railroad Strike
    Last updated: 2 months ago
    Image credit: Zuma Press [via The Wall Street Journal]

    Facts

    • US freight railroads and union leaders on Thursday reached a tentative labor agreement — brokered by Biden's administration — to avoid a national strike that would've damaged large parts of the economy. [1]
    • The deal includes a 24% pay raise for thousands of rail workers over the next five years, stretching back to 2020, as well as an additional vacation day, and unpaid time off for medical appointments without penalty. [2]
    • Once ratified, the deal — which affects around 60k employees — will also implement an immediate payout of $11k per worker. This reportedly avoids the $2B daily that the Association of American Railroads estimated a strike would cost. [3]
    • Labor Sec. Marty Walsh, who was thanked by Biden for brokering the talks, described the agreement as one that "balances the needs of workers, businesses, and our nation's economy" and avoids the "catastrophic impact" of a strike. [4]
    • The deal comes as US annual inflation in August hit 8.3%, and average hourly earnings for non-managerial employees rose 6.1% last month from the year before. [1]
    • With nearly one third of the US freight industry moving by rail, the strike would've left roughly 7k trains idle per day, hurting many industries that have already faced record inflation and supply chain issues. [2]
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    Spin

    Democratic narrative

    This is a huge win for Biden not only because he avoided a disastrous strike, but also because it reinforced his commitment to the trade unions who are huge supporters of Democrats and will be vital to victories in this fall’s midterm elections. Once ratified, this deal will give Democrats another Biden accomplishment to boast about on the campaign trail.

    Republican narrative

    Biden shouldn’t be celebrating this deal, which was in part caused by the inflation crisis he seemingly doesn’t know how to end. Railroad unions needed higher wages because the cost of living has skyrocketed, but giving workers more money will only keep the US in a wage-price spiral. This isn't a winning campaign topic.

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