President Joe Biden has called on Congress to find a quick solution to the problem that seems to exist between the railroad unions and the management, before December 9, 2022, which is the deadline fixed to arrive at a conclusion to the problem and also to avoid the chances of a potential rail strike.
The negotiations aimed at solving the issues had been going on since September, but all the efforts were in vain as they failed to arrive at a decision that was acceptable for both sides.
President Joe Biden replied to the situation and expressed his concerns about the devastating aftereffects if the problem leads up to a rail strike. According to the words of Biden, a railroad shutdown has the potential to devastate the economy of the nation and without the railroad services, most industries will shut down.
As a means to arrive at a solution to the problem, the President is calling on Congress to adopt the tentative agreement that exists between the two sections. According to the agreement, there is a 24% compounded wage increase from 2020 all through 2024 which also includes five annual $1,000 lump-sum payments. Out of the 12 labor unions, 8 of the unions show support towards the agreement but the remaining four do not abide by it.
The largest rail union in the nation, the Sheet Metal, Air, Rail Transportation (SMART-TD) also is one among the four unions that does not agree to the terms of the tentative agreement. The union is the representative of almost 28,000 workers and during the discussions that took place in September, the majority of the workers voted against the agreement.
According to reports, the prime reason behind the rejection is not compensation but it is reported to be issues like quality of life, scheduling, staffing levels, and also the lack of paid sick leave. Measures are taken by the senators and Congress to avoid the risk of a potential rail strike. It will be more than bearable for an economy that is already facing many difficulties from different sectors.
The speaker of the House, Nancy Pelosi made a statement on Tuesday, in which she said that Congress will vote on the bill on Wednesday in order to bring an end to the problems.
A rail strike at a time like this is an event that has the potential to have a substantial negative effect on the economy of the nation. According to the statistics released by the Association of American Railroads, about one-third of the exports of the nation are transported by rail.
On Monday, Congress was warned by a letter from the American Farm Bureau Federation, which predicted that a rail strike was unacceptable as it could easily put the nation’s economy and community supplies at a major risk. The letter also said that the Bureau was calling Congress to intervene in time to avoid a disaster that could hit the economy of the nation.
The letter also included the statistics of the calculated danger that could follow the rail strike. As per the numbers, such a strike could result in the stoppage of around 30% of the cargo shipments, which will in turn trigger a loss of about $2 billion per day to the country’s economy. Not only just the shipment of cargo, but a rail strike could easily affect around 7 million people who depend on the trains for their commute, says the letter.
As per the reports from major media firms, the labor unions do not find the intervention of congress appealing to them. According to their argument, such involvement on the part of Congress means they will lose their leverage in making a profitable bargain.
As of now, there is no proper settlement found for the issue, and finding a solution remains important, not just considering the future fate of the economy but also keeping in mind the fact that the holiday shopping season is underway, and thereby, it can also have an immediate effect on the market.