President Joe Biden announced a deal that will avert a nationwide strike that could have shut down America’s freight trains and devastated the economy less than two months before the midterm elections.
The agreement included 12 rail unions and all of the major U.S. railroads, including BNSF, Union Pacific, Norfolk Southern, CSX, Kansas City Southern and the U.S. operations of Canadian National.
Major U.S. freight rail carriers began to accelerate staffing cuts in recent years as they switched to a system known as precision scheduled railroading (PSR).
In 2000, Union Pacific employed 50,000 people and generated $11.8 billion. Today, Union Pacific employs almost 18,000 fewer people but manages to earn 85% more in revenue each year.
Union Pacific CEO Lance M. Fritz’s total compensation was $11,964,526 in 2019, $13,362,629 in 2020 and $14,476,508 in 2021. Chief Financial Officer Jennifer L. Hamann made $2,618,228 in 2020 and $3,445,786 in 2021.
The situation is common across the industry. Trains that were once staffed with five workers are now staffed with two, and carriers hope to cut that to one.
Workers themselves are caught in constant flux. Nearly all employees are on-call virtually around the clock, expected to report to work within 90 minutes for shifts that can last nearly 80 hours.
The final deal was negotiated by the unions that represent engineers and conductors, but all 12 of the rail unions will likely benefit from the concessions railroads made because the unions that agreed to deals earlier all had provisions in their deals that will allow them to do that.
Railroad workers secured a deal that will deliver 24% raises and $5,000 bonuses over five years, but it will also address some of their concerns about strict attendance rules and time off.
The railroad industry has said that average rail worker salaries will reach $110,000 by the end of this five-year deal in 2025.
The raises workers will receive as part of this deal will be the biggest ones they have received in more than four decades. The railroad industry has said that average rail worker salaries will reach $110,000 by the end of this five-year deal in 2025.
The deal includes one additional paid leave day a year, but railroads also agreed to let workers take unpaid time off for doctor’s appointments and medical procedures without being penalized under their attendance rules.
The financial terms of the deal closely follow the recommendations made by the Presidential Emergency Board, which provided significant raises, but didn’t address union concerns about working conditions.
Many workers are frustrated with current working conditions after the major railroads cut nearly one-third of their workforce over the past six years.
Hundreds of workers have left the industry this year as the railroads have been aggressively hiring new additional employees needed to handle all the freight. Shippers have complained about delayed deliveries and poor service, and federal regulators have demanded that railroads improve their service.