The White House has been mulling over contingencies to stave off the economic crisis that can be induced by rail workers going on strike.
White House Press Secretary Karine Jean-Pierre said the Biden administration is turning to truckers and air shippers for assistance should rail workers shut down operations when the deadline to reach a compromise deal with railway firms expire on Friday. The government is also said to be considering invoking emergency authorities while it conducts daily interagency meetings to assess supply chains and commodities risks.
An official inside the White House told Reuters that the administration told railroads and unions that “a shutdown is unacceptable and will hurt American workers, families and businesses, and they must take action to avert it.”
An estimate of around 115,000 U.S. freight rail workers are threatening to walk out if their wage increase and work rules pleas aren’t heard by the rail companies. US President Joe Biden enacted an executive decision on July 15 to block a strike then by naming an emergency board, called the Presidential Emergency Board (PEB), to attempt to formulate a compromise labor pact.
The Association of American Railroads estimates that a national freight rail shutdown would hurt the U.S. economy by at least US$2 billion per day. It is also expected to push inflation further as supply disruptions are anticipated to have an impact on commodities and derivative products.
The board endorsed a 24% compounded wage increase and US$5,000 in bonuses by 2024. However, the unions are not ready to take the deal, reiterating their call to drop the new attendance policies that will require workers to remain on call and be ready to come to work on most days.
“Our members are being terminated for getting sick or for attending routine medical visits as we crawl our way out of worldwide pandemic,” the union leaders said.
Unions and railroad have until Friday midnight to reach possible deals to appease the other workers not amenable to the PEB’s offer.
While Biden can’t bock a strike a second time, Congress can move to block or delay one. But the unions wrote to the lawmaking body, saying “it is imperative that negotiations between labor and carriers be permitted to play out.” It is also rumored that the two largest rail unions are already “distributing strike information and FAQ to workers.”
Information for this briefing was found via Reuters and the companies mentioned. 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.