On Friday, December 2, President Joe Biden signed into law House Joint Resolution 100, “which provides for a resolution with respect to the unresolved disputes between certain railroads represented by the National Carriers’ Conference Committee of the National Railway Labor Conference and certain of their employees.”
What that long title means is that the U.S. government has overridden the usual union ratification procedures of a tentative agreement to hammer out differences between employers and the 115,000 workers covered by the agreement. Eight of the 12 involved unions had agreed to the deal, which provides 24% wage increases but no sick days, and four had not.
Their refusal to agree seemed almost certain to lead to a strike in which all the unions would participate, shutting down key supply chains and badly hurting the U.S. economy. Some estimated the costs of a strike would be about $2 billion a day, freezing almost 30% of freight shipments by weight, and causing a crisis in all economic sectors—including retail, just before the holidays. It would also disrupt travel for up to 7 million commuters a day and stop about 6300 carloads of food every day from moving. So the government stepped in.
Biden asked Congress on Monday, November 28, to act to prevent a rail strike, but there was a long history behind this particular measure, and an even longer one behind the government’s pressure on railroad workers.
The story behind today’s crisis started in 2017 when former president Trump’s trade war hammered agriculture and manufacturing, leading railroad companies to fire workers—more than 20,000 of them in 2019 alone, dropping the number of railroad workers in the U.S. below 200,000 for the first time since the Department of Labor began to keep track of such statistics in the 1940s. By December 2020, the industry had lost 40,000 jobs, most of them among the people who actually operated the trains.
Those jobs did not come back even after the economy did, though, as railroad companies implemented a system called precision scheduled railroading, or PSR. “We fundamentally changed the way we operate over the last 2½ years,” Bryan Tucker, vice president of communications at railroad corporation CSX told Heather Long of the Washington Post in January 2020. “It’s a different way of running a railroad.”
PSR made trains longer and operated them with a skeleton crew that was held to a strict schedule. This dramatically improved on-time delivery rates but sometimes left just two people in charge of a train two to three miles long, with no back-up and no option for sick days, family emergencies, or any of the normal interruptions that life brings, because the staffing was so lean it depended on everyone being in place. Any disruption in schedules brought disciplinary action and possible job loss. Workers got an average of 3 weeks’ vacation and holidays, but the rest of their time, including weekends, was tightly controlled, while smaller crews meant more dangerous working conditions.
PSR helped the railroad corporations make record profits. In 2021, revenue for the two largest railroad corporations in the U.S., the Union Pacific and BNSF (owned by Warren Buffett), jumped 12% to $21.8 billion and 11.6% to $22.5 billion, respectively.
About three years ago, union leaders and railroad management began negotiating new contracts but had little luck. In July, Biden established a Presidential Emergency Board (PEB) to try to resolve the differences. The PEB’s August report called for significant wage increases but largely kicked down the road the problems associated with PSR. The National Carriers Conference Committee, which represents the railroads, called the report “fair and appropriate”; not all of the involved unions did.
And here is the deeper historical background to this issue: the government has no final power to force railroad owners to meet workers’ demands. In 1952, in the midst of the Korean War, believing that steel companies were being unreasonable in their unwillingness to bargain with workers, President Harry S. Truman seized control of steel production facilities to prevent a strike that would stop the production of steel defense contractors needed. But, in the Youngstown Sheet & Tube Co. v. Sawyer decision, the Supreme Court said that the president could not seize private property unless Congress explicitly authorized it to do so. This means that the government has very little leverage over corporations to force them to meet workers’ demands.
But, thanks to the 1926 Railway Labor Act, Congress can force railroad workers to stay on the job. The 1926 law was one of the first laws on the books to try to stop strikes by providing a mechanism for negotiations between workers and employers. But if the two sides cannot agree after a long pattern of negotiations and cooling off periods, Congress can impose a deal that both sides have to honor.
The idea was to force both sides to bargain, but a key player in this policy was the American consumer, who had turned harshly against railroad workers when the two-month 1894 Pullman Strike, after drastic wage cuts, shut down the country. For the most part, Americans turned against the strikers as travel became diabolically difficult and goods stopped moving. Even reformer Jane Addams, who generally sympathized with workers, worried that the economic crisis had made forgiving the strikers “well-nigh impossible.”
While management generally likes the current system, workers point out that it removes their most effective leverage. Employers can always count on Congress to step in to avoid a railroad strike that would bring the country’s economy to its knees. On November 28, CNN Business reported that more than 400 business groups were asking Congress to enforce the tentative deal in order to prevent a strike. At the same time, the Supreme Court in 1952 took away the main leverage the government had against companies.
And so the House passed the measure forcing the unions to accept the tentative deal on Wednesday, November 30, by a vote of 290 to 137. Two hundred and eleven (211) Democrats voted yes; 8 voted no. Seventy-nine (79) Republicans voted yes; 129 voted no.
But then the House promptly took up a measure, House Concurrent Resolution 119, to correct the bill by providing a minimum of 7 paid sick days for the employees covered by the agreement. That, too, passed, by a vote of 221 to 207, with three Republicans joining all the Democrats to vote yes. Those three Republicans were Don Bacon (R-NE), who has gotten attention lately for trying to carve a space for himself away from the rest of the party as someone concerned about practical matters; Brian Fitzpatrick (R-PA); and John Katko (R-NY).
It was a neat way for Congress to impose its will on the companies under the terms of the Railway Labor Act.
The Senate approved the bill on Thursday by a vote of 80 to 15, with Rand Paul (R-KY) voting “present” and four others not voting. The 80 yes votes were bipartisan and so were the 15 no votes. Five Democrats—Kirsten Gillibrand (D-NY), John Hickenlooper (D-CO), Jeff Merkley (D-OR), Elizabeth Warren (D-MA), and Bernie Sanders (I-VT)—joined ten Republicans to oppose the measure.
Then the Senate took up the concurrent resolution, which it rejected by a vote of 52 yes votes to 43 no votes, with five not voting. That is, the measure won a majority—52 votes—but because of the current understanding of the filibuster rule, the Senate cannot pass a measure without a supermajority of 60 votes. The yes votes for the sick leave addition were nearly all Democrats, along with six Republicans. The no votes were all Republicans, with the addition of one Democrat: Joe Manchin of West Virginia.
Biden maintains he supports paid sick leave for all workers, not just railroad workers, and promises to continue to work for it.
But the railway struggle was about more than sick leave. It was about a system that has historically made it harder for workers than for employers to get what they want. And it is about consumers, who—in the past at any rate—have blamed strikers rather than management when the trains stopped running.
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Notes:
https://www.senate.gov/legislative/LIS/roll_call_votes/vote1172/vote_117_2_00372.htm
https://www.congress.gov/bill/117th-congress/house-concurrent-resolution/119/text
https://www.congress.gov/bill/117th-congress/house-concurrent-resolution/119/actions
https://www.senate.gov/legislative/LIS/roll_call_votes/vote1172/vote_117_2_00371.htm
https://clerk.house.gov/Votes/2022491
https://clerk.house.gov/Votes/2022490
https://www.reuters.com/world/us/biden-expected-ask-congress-avert-rail-strike-source-2022-11-28/
https://www.bnsf.com/about-bnsf/financial-information/pdf/performance-update-4q-2021.pdf
https://www.progressiverailroading.com/bnsf_railway/news/BNSF-posts-record-earnings-for-2021--66004
https://railroads.dot.gov/sites/fra.dot.gov/files/fra_net/1647/Railway%20Labor%20Act%20Overview.pdf
https://www.freightwaves.com/news/2-unions-split-votes-on-rail-labor-agreement
https://www.reuters.com/world/us/biden-expected-ask-congress-avert-rail-strike-source-2022-11-28/
https://www.cnn.com/2022/11/30/politics/congress-rail-vote-house/index.html
https://www.washingtonpost.com/business/2022/12/03/rail-workers-paid-sick-leave/
https://www.cnn.com/2022/12/02/business/railway-labor-act-freight-railroad-strike/index.html
https://www.cnn.com/2022/11/28/business/rail-strike-business-groups/index.html
https://www.railwayage.com/freight/class-i/up-fritz-2021-most-profitable-year-ever/
Jane Addams, Twenty Years at Hull-House (1910; rpt. Urbana: University of Illinois Press, 1990), pp. 217-218.
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