Railway bargaining process seeks solutions, settles for trade-offs

During the Great American Toilet Paper Crisis in March of 2020, I found myself plugging some numbers into a website designed to calculate how long my supply of toilet paper at home would last me and crossed my fingers that the supply chain would be restored before I was to run out, according to the app, that December. (Serendipitously, I had stocked up that February, when the world still seemed so … normal.)

Never again do any of us want to experience a time when we don’t have access to the basic necessities for everyday living, whether it be toilet paper like in 2020 or gasoline like after the derecho or Busch Light at a Cyclone bowl game (which we won’t have to worry about happening this year.) But just last week we came perilously close to a catastrophic disruption to our country’s ability to transport basic material goods, due to an looming strike of around 125,000 railroad employees across 12 major railroad unions.

It would have cost the American economy an estimated $2 billion per day in lost economic activity by bringing railroad traffic, which carries 40 percent of the nation’s long-haul freight, to a standstill. It would have disrupted the operations of any business that uses materials transported by rail, including ADM, Quaker Oats and General Mills here in Cedar Rapids. It would have resulted in the already-inflated prices of goods rising even higher, and wreaked havoc on the supply chain, making the toilet paper shortage of 2020 seem minuscule by comparison.

It cannot be understated what a crippling effect a railroad strike would have had on the American economy. Nor can it be understated how close it came to happening.

Hashing out the labor deal from start to finish was not a quick process. It began on Nov. 1, 2019, with notices issued under Section 6 of the Railway Labor Act outlining the changes each party sought to pursue under the next collective bargaining agreement. Negotiations began in January 2020. They continued through January of this year with no agreement reached.

In February, it spilled over into mediation, from which both parties would request a release on more than one occasion over the following three months. Mediation, followed by a “super mediation” in May, went nowhere.

In June, the railway unions rejected the National Mediation Board’s offer for binding arbitration, officially beginning the “cooling off” period, the 30-day time frame required by law before either side is permitted to proceed with a work stoppage. On July 15, before the cooling off period could end, President Joe Biden created a Presidential Emergency Board (PEB) to arbitrate the matter under the Railway Labor Act.

There seemed to be some light at the end of the tunnel (pun intended) in mid-September, when Biden announced that a tentative agreement between the unions and the railway carriers after a marathon negotiating session lasting 20 consecutive hours. All that was left was for each of the 12 unions to ratify their respective agreements. But despite the fact that their own bargaining representatives had approved of the tentative agreements, four of the 12 unions rejected them in October and November. With a strike set to begin as early as Dec. 9, Biden asked Congress to use their legislative authority to impose the contract recommended by the PEB.

Last week, Congress did just that, first passing a bill to avert the strike in the House of Representatives on Wednesday. The Senate followed on Thursday, after which the bill headed to the White House to be signed into law, averting an economic catastrophe right before the Christmas holiday.

But while the ending of the stalemate should be welcome news to anyone who doesn’t want to see the economy derailed (again, pun intended) many union members and their supporters remain unhappy that the demand for paid sick leave — the main reason for the continued impasse — was not granted in the agreement recommended by the PEB and accepted by the unions’ negotiators. At face value, it seems like such a simple, straightforward argument: Over three-fourths of American workers had access to some sort of paid sick leave in 2020, according to the Pew Research Center. Commonality was one of the unions’ key arguments in to support their request for paid sick leave — 15 days’ worth, to be specific. The fact that some of the 12 unions did not have basic sick days at all was another.

But the PEB found that “although some [unions] have negotiated sick leave, most have opted instead to bargain for Supplemental Sickness Benefit Plans (‘SSBPs’).” Given that the sick leave was now being sought on top of the more generous longer-term sick benefits for most of the unions, the PEB disagreed that the 15 days of standard sick leave was warranted, describing it instead as “an overly broad and very costly proposal.” The rail carriers had estimated that the proposed sick time would cost $688 million annually, or the equivalent of a 6.4 percent wage increase on top of the 24 percent compounded raise that the PEB had recommended.

In short — the unions, in this case, were asking too much, and the board was “simply not in agreement that this sick leave proposal is otherwise warranted.”

House Democrats tried their own paid sick leave “fix” by passing a separate bill mandating seven days paid sick leave. It did not make it into the final version of the Senate bill. Passing it — in any form — would have set a terrible precedent, for it would fly in the face of why companies and unions negotiate contracts in the first place: To reach a mutual agreement that both sides agree represents the best interests of their respective stakeholders.

“Now is not the time for Congress to put its thumb on the scale and selectively add to labor contracts,” said Ian Jefferies, President and CEO of the Association of American Railroads, the group representing the railway carriers. He’s correct. The very concept of bargaining in good faith could start to look very different if either party believed that their meticulously negotiated deals could be thwarted by alterations thrust upon them by Congress. Or if either party opted to hold out in the hopes that a Congress with an ideologically-aligned majority would add last-minute terms favorable to their side.

I’m reminded of a quote by economist Thomas Sowell, who said, “There are no solutions. There are only trade-offs.” This whole process has been a series of trade-offs disguised as solutions. To solve the problem of unfair labor practices, workers organize to collectively bargain. The trade-off is that each worker yields their individual voice to someone acting on their behalf, at the risk that those acting on their behalf will not achieve what the worker hopes for, as happened with four of the 12 unions.

To solve the problem of a stalemate, workers threaten to strike. The trade-off: Those who do not wish to strike are nevertheless compelled to do so through the expectation of solidarity.

To solve the problem of an employer who has allegedly not bargained in good faith, workers follow through on their threat and strike. The trade-off, as it very well could have been by this time next week: Disruption — not only to workers’ lives and company operations, but the entire economy.

And to solve the problems of past labor exploitation, we get laws passed to protect workers. The trade-off: That the same government that enforces those protections is also tasked with the duty of drawing the line at what’s reasonable and warranted — and what’s not. That’s exactly what happened. And regardless of whether it should have ever reached the critical stage it did, we should all be counting our blessings this Christmas that a railway strike will indeed not happen.

Comments: (319) 398-8266; althea.cole@thegazette.com

Correction: The original version of this article described the rail carriers’ estimate of sick time cost at $688 billion. It has been changed to reflect the correct estimate of $688 million.

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