A Strike, Averted

https://www.nytimes.com/2022/12/04/briefing/railroad-workers-demands.html

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Congress and President Biden imposed a labor agreement between major railroad companies and their workers last week, averting the possibility of a strike that would have disrupted the economy in the middle of the holiday shopping season. The agreement gives rail workers a pay raise and other benefits but not paid medical leave. I spoke to my colleague Peter S. Goodman, who covers supply chains, about what’s behind the workers’ discontent.

Ian: The deal that Congress enforced is one that the Biden administration helped negotiate earlier this year, which several unions rejected. Why were they against it?

Peter: The lack of paid sick leave caused the workers I spoke with to vote it down, that and draconian scheduling policies. Rail workers are constantly missing wedding anniversaries, funerals, birthday parties. It’s baked into the job. But in addition to that, there’s pressure to be at the job site even when they’ve got emergencies or sick children.

Here’s an example. I talked to a guy named Anthony Gunter, who’s based in eastern Tennessee and worked on maintenance crews repairing tracks for Norfolk Southern Railway. His dad had worked there for 40 years, and Gunter remembers trying to sneak into his duffel bag as a kid to join him on the road. Gunter regularly worked four 10-hour shifts in a row, swinging giant hammers, pounding stakes into railroad ties. His son had been born with a heart defect, and last year he stayed home for his son’s surgery. His supervisor pressured him to come back, saying: “You’re putting me in a tough spot. You have to be here.” Gunter was furious, so he quit.

Wow. That sounds like a difficult choice. What about workers who ended up supporting the deal?

There was unhappiness even among workers whose unions voted to ratify it. But their calculus was: Let’s be pragmatic. There’s no way in hell they’re going to let us strike, Congress is going to intervene and this is the best we’re going to get.

The deal did benefit workers on the issue of reimbursements for lodging on the road. Many rail workers spend long periods away from their families, with schedules subject to change. Maintenance gang workers like Gunter, who sometimes drove 12 hours from his home, have traditionally been given reimbursement rates so low that they eat terribly and stay two or three to a room in crappy motels. One worker told me he buys cheap clothes to sleep in and throws them away because he’s scared of bringing bedbugs home to his family. So higher reimbursement rates are a victory.

Have working conditions always been this bad for rail workers?

From the beginning, in the 19th century, the railroads were run by financiers who operated them as financial assets, often to the detriment of service. Union Pacific, one of the companies that built the Transcontinental Railroad, made a priority of securing land from the federal government instead of creating efficient routes. Another company pressed Chinese laborers into service to build the tracks to drive down wages. So railroads have always employed fairly ruthless techniques to keep a lid on costs while rewarding investors.

And you can argue that what they’ve done in recent years is about gratifying Wall Street. They laid off nearly a third of their work force before the pandemic, worsening freight service while increasing profits, and handed out handsome stock dividends. It’s good for shareholders. It’s good for investors. But shippers have complained, and it’s miserable for workers because there are fewer people to do the same amount of work.

It seems unusual for the president and Congress to have this much say over labor disputes.

Yeah, the Railway Labor Act, which gives them this power, is an outlier. It goes all the way back to tumultuous strikes in 1877 that shut down rail service and prompted the president to send in troops. Because there are now alternatives to shipping by rail, like trucking, many labor experts argue that it’s an outdated system that gives the railroads leverage over their work force. Rail workers can try to strike, but their only real play is to threaten to sabotage the American supply chain, to disrupt economic life for everyone.

As you noted, we now have trucks to move cargo. So how essential are trains today?

A hell of a lot of stuff still travels by rail — 40 percent of freight in the U.S. And it’s a central piece of the global supply chain. What we’ve learned through the great supply chain disruption during the pandemic is that if any part of that system slows down, we get backups everywhere else.

A strike would have produced a real economic shock. There would have been shortages of chlorine used in wastewater treatment plants and chemicals used to make paints and fertilizers. It would have meant higher prices for crops and other goods at a time when people are already paying more for groceries because of inflation. It would have disrupted jobs that depend on rail to move stuff, whether it’s retail workers or contractors working on houses.

It’s clear that the Biden administration recognized the political pitfalls of telling rail workers that the work they do is more important than the terms of their compensation. Biden was clearly spooked by the prospect of another supply chain crisis on his watch. And he opted not to force the railroads to swallow paid sick leave as the cost of averting a strike.

More about Peter: He’s reported on supply chains for three decades and from more than three dozen countries. He’s the author of “Davos Man: How the Billionaires Devoured the World” and is working on his next book, about pandemic shipping disruptions, called “How the World Ran Out of Everything.”

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