OMAHA, Neb. (AP) – The Special Counsel appointed by President Joe Biden to intervene in deadlocked rail contract talks suggested on Tuesday that 115,000 railroad workers are set to get 24% raises and thousands of dollars in bonuses under a new deal to avoid a strike.
The railways and the unions will use these recommendations as the basis for a new round of negotiations over the next month. It remains to be seen, however, whether the railroads will accept the higher wages or find ways to address union concerns about working conditions.
If the two sides fail to agree on a new deal by mid-September, federal law would authorize a strike or lockout. But Congress is likely to step in before then to keep the supply chain moving.
A railroad strike could devastate businesses that rely on Union Pacific, BNSF, Norfolk Southern, CSX and other major freight railroads to deliver raw materials and ship their products. In previous national rail labor disputes, lawmakers have voted to impose conditions on the railroads before workers can strike.
A White House official said Biden was optimistic the report would provide a good framework for successful negotiations because avoiding a rail shutdown is in the nation’s interest.
The report was circulated to the parties on Tuesday and the Associated Press obtained a copy, but the railroads and unions did not immediately comment on the details.
The railways entered the Emergency Presidential Council process a month ago, far short of the 12 participating unions. The unions demanded a 31% raise over the five years of the deal, while the railroads offered only 17% compound increases. Unions also don’t want to see the cost of their health coverage go up much in a new contract.
According to the report, the board recommends salary increases of 24% and bonuses of $5,000 over the term of the contract while adding an additional paid day off each year. The report also recommends keeping the same basic health insurance plan, but that employees bear a greater share of the costs through higher monthly premiums.
The council says it believes workers are entitled to higher wages than those offered by the railroads due to the current high inflation, tight labor markets and high railroad profitability. The report also states that railway work has become more demanding in recent years due to the pandemic and the reduction in railway costs.
Railway workers have had no increase since 2019, while contract talks drug on. Workers expect to be compensated after staying on the job throughout the pandemic and suffering major job cuts in recent years. And strikes have become more frequent over the past two years in a variety of industries because unions generally feel authorized ask for more.
Major freight railways have cut almost a third of their jobs over the past six years by overhauling their operations to run fewer longer trains that require fewer locomotives and fewer employees. Unions say railroads expect more from workers who stay, and some railroads have tightened attendance policies that it is difficult to take time off because of all the job cuts.
In addition to disagreements over wages and benefits, unions have strongly opposed a railroad proposal to reduce the number of workers in a locomotive from two to one. A new proposed federal rule this would require two-person crews in most cases, it would be more difficult for the railroads to reduce crew sizes, but the railroads have been calling for the change for several years. Unions say keeping two people on crews is not just about preserving jobs, but also about ensuring safety.
Reaching a new agreement would likely make it easier for the railways to hire new employees, which they recognize they need to do to improve service and reduce delays that have plagued freight shipments this year. The major freight railways have all said they want to hire hundreds more workers, but the shortage of workers is making this difficult.
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