Monday, October 6, 2025

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Biden Touts ‘Tentative Deal’ With Unions To Prevent Railway Shutdown: 24% Effective Wage Increase, US$11,000 Payment Each

US President Joe Biden is taking a victory lap after his administration put forth a ‘tentative deal’ with railway unions, potentially averting a shutdown of the tracks on Friday that could’ve cost the American economy US$2 billion per day.

The agreement, drafted a day before the Friday midnight deadline, was hashed out by the Biden administration –led by Labor Secretary Martin J. Walsh,– along with the railway operators and the union representatives. Language of the deal includes a compounded 24% effective salary increase, a combination of retroactive and future increases between 2020 to 2024, as well as an average US$11,000 lump sum payment for each worker.

“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned,” Biden said. “The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come.”

The involved parties reportedly hammered out the deal for 20 hours, working hard to prevent a railway shutdown which could’ve been devastating for the midterm elections in November.

A potential walk out of the 115,000 U.S. freight rail workers is feared to cripple the US economy as railways are the main thoroughfares for the country’s energy resources like coal. It also comes at a time when it’s harvest season for most of America’s farmers, spurring fears of a further potential inflation surge.

The US consumer price index continued to rise in August 2022, landing at a staggering 8.3% year-on-year–with food inflation recording a 43-year high at 11.4%.

Prior to the recent agreement, the Biden administration had been weighing contingencies to minimize the impact should a railway shutdown ensue, including turning to truckers and air shippers for assistance.

The new deal still has to get the sign off of the railway union members. But even if the agreement has been rejected, a railway shutdown has been staved off for several weeks due to the standard language included in such a deal.

Following the announcement of the deal, Amtrak said it is now working to resume canceled train routes, reaching out first to the affected customers from when it first canceled trips.

The railway operator initially halted long-distance trains in anticipation of the looming rail workers’ strike.


Information for this briefing was found via Daily Mail and CTV News. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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