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The impact of a potential major railroad shutdown


The Biden administration is scrambling to avoid a nationwide railroad shutdown that could happen as soon as Friday. Labor Secretary Marty Walsh met with railroad companies and union members today trying to broker a deal. A shutdown would wreak havoc on an already stressed supply chain, the economy, travel and the president's political agenda.

Here to talk about it are NPR politics reporter Ximena Bustillo and NPR labor and workplace correspondent Andrea Hsu. Hello to both of you.



MCCAMMON: So, Ximena, I'll start with you. Just bring us up to speed. What is the state of play right now?

BUSTILLO: Right. So over the last two years, railroad companies and unions have been stuck renegotiating their union contract. And this summer, President Biden began to get involved as there seemed like there wasn't going to be a deal reached anytime soon. And Biden created an emergency board to help speed up a resolution that provided their recommendations. But there still isn't a deal, and they have until tomorrow night at midnight before workers go on strike. So today, they've been in a daylong meeting with Labor Secretary Marty Walsh with the goal of reaching an agreement.

MCCAMMON: OK. So pretty high stakes here - what is the holdup?

BUSTILLO: Yeah. Both sides have essentially accepted the economic side of the proposals that the emergency board recommended, which would do things like increase wages for workers by 24% by 2024. But two of the unions are still unhappy about workplace attendance policies that haven't been addressed. So really, that's the holdup at about this point. But it is very significant, so over 100,000 workers are prepared to strike. And it would pretty much stop movement of 30- to 40% of goods.

MCCAMMON: Yeah. Andrea, I want to bring you in to talk more about that. I mean, what kind of economic impact should we be bracing for if these rail workers do strike?

HSU: Well, Sarah, it would really depend on the length of the strike, but it could be significant. I mean, consider all the stuff that moves by rail in this country. It's everything from coal for power plants to chemicals used in pharmaceuticals to car components. And if those things can't be delivered, it could cause factories to shut down temporarily. You might notice some empty store shelves if things like bananas aren't delivered.

Also, some passenger trains that use freight rail lines would be affected. Amtrak says it's canceling all of its long-distance trains starting tomorrow but, to be clear, not along the busy northeast corridor. But some commuter rail systems in Southern California, Maryland, Virginia, even Chicago will be affected if there's a strike. And the railroad industry warns a nationwide rail shutdown could cost as much as $2 billion a day in lost economic output.

MCCAMMON: Now, Ximena, this kind of economic impact would not be a good political story for President Biden. What is the reaction from the White House so far?

BUSTILLO: So far, the White House is saying that they are waiting and seeing. So Transportation Secretary Pete Buttigieg, Agriculture Secretary Tom Vilsack and Labor Secretary Marty Walsh have been making what I'm told is hundreds of phone calls urging everyone to come to an agreement before the Friday deadline. But they, at the end of the day, can't ignore the risk to supply chains and prices that Andrea just talked about, right? We're seeing inflation numbers from yesterday are still higher than what people want. And a major disruption, even for just a day or two, could throw a major wrench into all of the sectors that are barely recovering from the disruptions of the pandemic.

And this would all be happening at the same time that Democrats are heading into a midterm election where prices and economic stability of families are top of mind for voters. Also on top of all of that, today in Detroit, Biden thanked specifically union workers for helping him win the 2020 election. And he's long sought out the title of being this pro-union president. So at the same time, even if he avoids a strike, if the deal doesn't land favorable for workers, he could lose some legitimacy there.

MCCAMMON: And one of the big sticking points has been, as we mentioned, workplace attendance policies. Andrea, what is the key issue there?

HSU: Well, just in the last couple years, in the middle of the pandemic, several of the railroads, including Union Pacific and BNSF, introduced these new points-based attendance policies. They were aimed at making sure they had enough people to run the trains. So the workers hate these policies. They see them as far too punitive because workers are now penalized for taking unscheduled time off. Let's say you get sick or your child gets sick, and you can't report to work. Well, you get docked points. And it's more points on Fridays and Saturdays and a lot more on holidays and so-called high impact days, including Super Bowl Sunday. And if you run out of points, you get a 10-day suspension. And if that happens multiple times, you could be terminated.

MCCAMMON: What's the rationale for the system?

HSU: Well, the railroads say it was aimed at improving consistency for both their crews and their customers. And that's important because railroads have been handling record volumes of cargo in the pandemic. But the workers are outraged. This has come amid a public health crisis, when workers elsewhere have gotten more flexibility to take care of themselves and their families, not less.

I spoke with Kathleen Bisbikis. Her husband has worked for the railroads for 24 years out of Stockton, Calif. And she says, at that terminal alone, they've seen a lot of people quit over this new policy.

KATHLEEN BISBIKIS: The number of people that have left - mind-blowing. I'm talking about older, 21-plus years at the railroad - they've left because they just don't want to deal with it.

HSU: And, Sarah, the unions had been asking for paid sick days in addition to personal leave days they already get, but it appears that that's off the table. But they're still holding out for some kind of relief from the attendance policies.

MCCAMMON: Ximena, if there is a strike, what else might Washington be able to do to resolve it?

BUSTILLO: Right. So the railway sector is very unique because Congress and the president do have the ability to step in. And that's thanks to the Railway Labor Act, which was first passed in 1926. And so Congress could take on the power to ban a strike outright or force groups into arbitration. And it would do so by passing a bill and sending it to the president's desk like it would any other law. Now, Democrats have, as we've stated, taken more of a wait-and-see approach to let the groups negotiate at the table first before they ban any sort of strike or take any sort of action. But it's not like it hasn't happened before.


BUSTILLO: So in 1992, Congress sent a bill to then-President Bush to force the end of a railroad shutdown that lasted for two days, also caused by a labor dispute.

MCCAMMON: NPR's Ximena Bustillo and Andrea Hsu, thanks to both of you.

BUSTILLO: Thank you.

HSU: You're welcome. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Andrea Hsu is NPR's labor and workplace correspondent.
Ximena Bustillo
Ximena Bustillo is a multi-platform reporter at NPR covering politics out of the White House and Congress on air and in print.