Omaha: A special board appointed by President Joe Biden to intervene in stalled rail contract negotiations suggested Tuesday that 115,000 rail workers get a 24% pay increase and thousands of dollars in bonuses as part of a new deal to avert the strike.
Railroads and the union will use those recommendations for a new round of talks next month. However, it remains to be seen whether railroads will agree to higher wages or find ways to address union concerns about working conditions.
Federal law will allow for a strike or lockout if the two parties do not agree on a new deal by mid-September. But Congress will intervene before that to keep the supply chain running.
The rail 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 past national rail labour disputes, lawmakers have voted to impose conditions on railroads before workers go on strike.
A White House official said Biden is optimistic the report will provide a good framework for successful negotiations because avoiding a rail shutdown is in the nation’s interests.
The report was distributed to the parties Tuesday, and The Associated Press obtained a copy of it, but the railroads and the unions didn’t immediately comment on any details.
The railroads entered the Presidential Emergency Board process a month ago, far apart from the 12 unions. The unions have been seeking a 31% raise over the five years of the deal, while the railroads offered only 17% in compounded raises. The unions also don’t want to see the cost of their health care coverage increase much in a new contract.
According to the report, the board recommends 24% wage increases and $5,000 in bonus payments over the contract’s life while adding one additional paid day off each year. The report also recommends keeping the same basic health insurance plan but having employees take on a larger share of the costs through higher monthly premiums.
The board believes workers are entitled to higher wages than the railroads have proposed because of current high inflation, tight labour markets and railroads’ strong profitability. The report also says that railroad work has become more demanding in recent years because of the pandemic and cost-cutting at the railroads.
Railway workers have gone without pay hikes since 2019 while contract negotiations are on. Workers are expected to be compensated in recent years after staying at work during the pandemic and widespread job cuts. And strikes have become more common in various industries over the past two years as unions generally feel empowered to demand more.
Major freight railroads have lost about one-third of their jobs in the past six years. They changed their operations to run shorter, longer trains requiring fewer locomotives and staff. Unions say railroads expect more from workers who stay, and some railroads’ tighter attendance policies make it difficult to take time off as all jobs are cut.
Reaching a new agreement would likely make it easier for railroads to hire new employees, which they acknowledge they need to improve service and cut down on the delays that have plagued freight shipments this year. The major freight railroads have all said they want to hire hundreds more workers, but worker shortages are making that difficult.