Rail Union Rejects Labor Deal, Raising Risk of Strike

Nationwide rail strike would be devastating for U.S. economy

Image Credits: Scott Olson/Getty Images.

On Monday, America’s third-largest union for workers in freight rail, which represents almost 12,000 railroad employees, rejected a temporary agreement arranged by the administration of US President Joe Biden to prevent a potentially crippling nationwide railroad strike, according to NBC News.

In September, trade unions and major US railway companies signed a preliminary agreement, which made it possible to remove the threat of a general railway strike, which could stop the movement of goods throughout the country and affect the supply of food and fuel both in the United States and abroad.

According to a statement from the Brotherhood of Maintenance of Way Employees, which is a division of the Teamsters Union – 56 percent of workers voted against the tentative agreement.

Rejecting the agreement may lead to a nationwide rail strike that would be devastating for the economy, according to US media.

The rail shutdown threatens to freeze nearly 30 percent of the US freight traffic and cost the US economy $2Bln a day, as well as trigger an increase in inflation, and a cascade of transport problems affecting energy, agriculture, manufacturing, healthcare and retail.

Earlier, Biden announced that a tentative deal had been reached between several unions and freight railway companies that would allow the industry to operate effectively as a vital part of the US economy.

The deal provides for a 24 percent increase of rail workers’ wages over the next five years, an improvement in their working conditions, and a cap on the cost that rail workers pay for healthcare.

The tentative agreement with the unions, which collectively represent approximately 120,000 rail workers, would avert a potential nationwide strike.

According to the Bureau of Labor Statistics, the number of railway workers in the United States has fallen from 600,000 in 1970 to about 150,000 in 2022 – a 75 percent decline.

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