'The economy is in jeopardy': President Biden again urges Congress to help avert railroad strike

‘The economy is in jeopardy’: President Biden again urges Congress to help avert railroad strike

Pressure is high for unions and railroad management to reach a labor agreement before a potential railroad strike hits the United States in 10 days.

Negotiations have been ongoing since September, but after the two sides failed to reach an agreement, President Biden ordered Congress to intervene before the December 9 deadline.

“Congress must act to prevent [a rail strike]”, Biden Told journalists on Tuesday. “It’s not an easy decision, but I think we have to do it. The economy is in danger.

According to the Association of American Railroads, approximately one-third of US exports are by rail.

“Let’s be clear: a rail closure would devastate our economy,” Biden said. tweeted In Monday. “Without rail freight, many American industries would close.”

President Biden shakes hands with Secretary of Labor Marty Walsh on September 15, 2022 after announcing a tentative labor agreement to avert a nationwide railroad strike.  (Photo by Anna Moneymaker/Getty Images)

President Biden shakes hands with Secretary of Labor Marty Walsh on September 15, 2022 after announcing a tentative labor agreement to avert a nationwide railroad strike. (Photo by Anna Moneymaker/Getty Images)

These industries include oil and gas, which depends on tank cars, agriculture, automobile production, consumer goods, and manufacturing.

The president is asking Congress to pass legislation that would adopt the tentative agreement that exists between railroad workers and operators. This agreement provides a compound salary increase of 24% from 2020 to 2024 as well as five annual lump sum payments of $1,000.

Eight of the 12 unions accepted it, but four – including the country’s largest rail union, Sheet Metal, Air, Rail Transportation (SMART-TD), which represents 28,000 employees – saw a majority of their workers vote against it. agreement in September.

Compensation would not be the determining factor for rejection – the main sticking points include quality of life, hours, staffing levels and the lack of paid sick leave.

House Speaker Nancy Pelosi (D-CA) declared Tuesday that Congress will vote Wednesday on a bill to resolve the ongoing dispute. Meanwhile in the Senate, Majority Leader Chuck Schumer (D-NY) said he and Sen. Mitch McConnell (R-KY) agreed to push the bill through as soon as possible, “sooner” than the December 9 deadline.

A freight train engine and shipping containers are seen in a Union Pacific Intermodal Terminal yard on November 21, 2022 in Los Angeles.  (Photo by Mario Tama/Getty Images)

A freight train engine and shipping containers are seen in a Union Pacific Intermodal Terminal yard on November 21, 2022 in Los Angeles. (Photo by Mario Tama/Getty Images)

“We don’t have the capacity to do it”

A strike would mean a halt to operations across the country. Not only transportation would be affected, but also shipping and freight, which have already been embroiled in supply chain disruptions.

“These are companies that have had inventory issues since 2020,” Mark Okerstrom, president of Convoy, a U.S. trucking software company, told Yahoo Finance Live (video above). “COVID-related disruptions in 2021 have continued this year, so it would just be adding disruption on top of disruption.”

On Monday, more than 400 groups — including the American Chamber of Commerce, the National Retail Federation and the American Farm Bureau Federation — wrote a letter to Congress warning of the consequences of a strike and urging them to intervene.

“The risks to our nation’s economy and communities make a nationwide railroad strike simply unacceptable,” the letter said. “Therefore, in the absence of a voluntary agreement, we call on you to take immediate action to prevent a national railway strike and the certain economic destruction that would follow.”

The letter warned that halting rail traffic could halt nearly 30% of U.S. freight shipments and cost the economy up to $2 billion a day in addition to worsening the current inflationary environment. It also predicted that up to 7 million travelers a day would see their train services disrupted.

President Biden speaks during an event with business and labor leaders on November 18, 2022 in Washington, DC.  (Photo by Win McNamee/Getty Images)

President Biden speaks during an event with business and labor leaders on November 18, 2022 in Washington, DC. (Photo by Win McNamee/Getty Images)

According to CNN Business, however, the unions do not want Congress to intervene, arguing that it would take away their influence at the bargaining table.

Okerstrom said a railroad strike would be “really important,” especially at this time of year when the holiday shopping season is underway.

“About 7,000 of them [freight trains] move every day” via long haul, Okerstrom said. It would take about 470,000 new long-haul trucks to come on the market to replace this…. We don’t have the capacity to do that.

Adriana Belmonte is a reporter and editor and covers politics and health care politics for Yahoo Finance. You can follow her on Twitter @adrianambells and contact her at adriana@yahoofinance.com.

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