Rail Labor Secured a Good Deal. They Should Ratify.

We are in the midst of a golden age for labor. Support for unions has risen to the highest level since 1965. Many attribute the increase to the impact of the COVID pandemic not just on the labor market – which remains strained – but on how people view work.

This is particularly true in the more challenging, blue-collar jobs. One such profession – railroading – has been under the microscope this year unlike at any time since the early 1990s.  Most Americans don’t pay attention to this sector, yet as railroads and labor union leaders recently went deep into the 11th hour to reach new collective bargaining agreements, the nation learned how important railroads are to our economy.

A shutdown would cost the economy some $2 billion per day and could worsen inflation. President Biden and cabinet leaders intervened, helping broker tentative agreements with the two largest unions, averting a strike, and sending the deals to workers to ratify.

Since August, six unions have ratified the deals, and four ratification votes are pending.  Two unions have rejected the tentative agreement, and there is growing concern that some other unions may do the same and that we will again be facing economic calamity later this year.

This should not happen.

These are historically rich deals based on the framework recommended by a panel of three neutral arbitrators hand-picked by President Biden. The agreements are the product of the actions that elected rail labor leaders took with the support and direct intervention of the President, an unabashed supporter of organized labor. They will make jobs that already were in the 93rd percentile of total compensation of U.S. wage earners even better.

Staring down a sure economic recession, putting these agreements to bed now is essential.

Against the backdrop of sensational media coverage and residual rancor, observers should understand a few realities.

The collective bargaining process between labor and management groups is designed to promote and result in compromise. It is virtually unheard of for either party to get everything it wants, and it is often said by experienced negotiators that a good deal is one where everyone leaves the bargaining table a little unhappy. That is certainly the case here.

Management believes that pay increases in the agreements are especially rich, and some labor organizations and employees believe that the agreements did not go far enough to address quality-of-life concerns. These feelings of dissatisfaction in parts of an agreement are normal, and they typify a fair deal.     

It is hard to argue that the 24 percent wage increase is not very significant. It is also fair to say that the average pay of a rail employee, which will exceed $110,000 by the end of the new contract, is excellent. Most American workers would also jump at valuable and secure federal retirement program that railroads fund and the chance to participate in the platinum-level health plan these deals maintain.

Moreover, the agreements provide for additional paid time off and, for some work groups with less predictable schedules, provide new means of scheduling time off that will require further negotiations.

In this respect, the narrative that rail employees are systematically mistreated and unable to miss work when sick is inaccurate. Railroad workers get time off for illness. They also have sickness benefits that replace a portion of their income, starting after as few as four days of absence for up to 52 weeks.

Importantly, the Biden-appointed Presidential Emergency Board considered and addressed the question of additional pay for sick time thoroughly. It found no need to change this structure, especially considering the significant compensation package found elsewhere in the PEB’s recommendation. 

The clock is ticking.  If workers fail to accept these terms negotiated by their leaders, Congress may intervene. Democrat and Republican lawmakers have indicated that they will act, possibly instituting the initial PEB framework into law.   

This shouldn’t have to happen. The parties should accept these deals, and any issues that were not addressed can be raised again during the next round of negotiation. If the parties don’t accept these deals, however, Congress must be prepared. There is simply too much at stake for the economy.

Jerry Glass is the President of F&H Solutions Group, a top management labor relations firm. He has extensive experience negotiating under the Railway Labor Act, and he has appeared as an expert witness at the Presidential Emergency Board hearings convened this year.