Rail Strike Timeline Comes Into Focus as Deadline Looms

A BNSF engine pulls Metra commuter train cars at the Metra/BNSF railroad yard outside of downtown in Chicago on Sept. 13, 2022. Scott Olson/Getty Images

The timeline for the potential rail line strike across America has now become clearer with four major unions deciding not to strike until next month.

In September, a tentative deal between freight rail companies and unions was brokered by the White House. At the time, President Biden had called it an “important win” for the American economy and people. However, four unions have decided not to ratify the deal, raising the possibility of a rail strike that could seriously affect the economy.

On Tuesday, the Brotherhood of Railroad Signalmen (BRS) announced that it was extending its status quo period through Dec. 8, 2022, according to CNBC.

This puts the union in alignment with similar decisions taken by other unions like SMART-TD, the Brotherhood of Maintenance of Way Employees (BMWED), and the International Brotherhood of Boilermakers.

If an agreement between the railroad companies and unions is not arrived at by the date, a potential strike could begin the next day on Dec. 9.

The initial deal gave workers a 24 percent pay raise over a five-year period, granted an additional personal day off, included an agreement on capping health care costs, and allowed workers to miss work for medical reasons without having to face penalties.

Railroads have called the deal a generous one but unions say that more needs to be done, with paid sick leave being a conflict point.

While unions insist on paid sick leave, railroads refuse it as they claim the unions agreed to forgo the benefit to secure short-term disability benefits and higher pay.

In an interview with Bloomberg, Jared Cassity, the alternate national legislative director for SMART-TD, said that he is not optimistic about rail companies continuing negotiations.

“There is nothing that obligates them to give any more at this point,” Cassity said. “We’re at the end of the Railway Labor Act, and ultimately the end is a lockout or strike. That’s where we are.”

Economic Impact

In a recent report (pdf) detailing the potential impact of a rail strike on the U.S. economy, the American Chemistry Council warned that a one-month strike could lead to a loss of around 700,000 jobs in the first half of 2023, a number that will rise up to 2 million should the strike last for two months.

At the same time, GDP will decline by 1 percent, shaving off $156 billion in case of a one-month strike. And if the strike lasts for two months, around 2 percent of the GDP will be lost.

In addition, the producer price index (PPI)—a measure of wholesale inflation—will rise by 4 percent and 12 percent in case of a one-month or two-month strike respectively. Customers might fuel inflationary pressure due to fear of shortages, it warned.

“With added pressure to the already high inflation, the Fed will be forced to raise rates even more than it already had, which will send the economy into a recession earlier than anticipated, and perhaps for longer,” the report said.