Railroad Labor Unions – Congress Pushes to Avoid Rail Strikes
Adding on to the economic worries the United States has faced this year, the chances of a nationwide railroad strike are growing by the day as Congress now sets to enact a plan of action to avoid the dilemma at all costs. In a tumultuous labor market, railroad workers have threatened to strike against railroad companies after months of anger regarding refusals to offer paid sick leave and other concerns. The strike, which can include up to 115,000 union members, would disrupt an already shaken industry that can cause a loss of up to $2 billion daily. As transportation has already been damaged by the pandemic and rising energy prices, a massive strike would further lead to greater supply shortages and inflated prices on goods.
Seeing the huge downside such an act could have on a weakened economy, Biden and Congress have set a plan of action to guarantee this event does not occur. They propose a ban on the union’s ability to strike against the railroad companies, at the cost of these members’ sick leave. Additionally, a rail strike was avoided previously after these workers were granted a 24% pay hike until 2024, but 4 out of the 12 unions in dispute did not take the deal. Nevertheless, the bill proposed by Biden to halt these strikes will need 60 votes to advance past Senate, and if it fails, Congressional leaders will need to return to the negotiating table. As the dilemma unfolds, investors should understand that railroads, which can potentially have these strikes as early as December 9th, transport 95% of ethanol in gasoline, 25% of all domestic grains, and a substantial portion of retail merchandise.
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I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.