The city of Omaha is in Nebraska. President Joe Biden on Friday blocked a freight railroad strike for at least 60 days by naming a board of arbitrators to intervene in the contract dispute, which would have disrupted all kinds of shipments.
The move will keep 115,000 rail workers on the job while the arbitrators make recommendations for both sides to consider. There was a chance of a strike before Monday. There is a chance of a new round of negotiations.
The president wrote in an executive order that he'd been told by the National Mediation Board that the disputes threaten to interrupt interstate commerce to a degree that would cause a section of the country to lose essential transportation service.
Congress would likely vote to impose terms or take other action if the railroads and their unions can't agree on a contract in 60 days.
According to the United Rail Unions coalition, current economic data shows that the raises the labor unions are asking for are more than justified when compared to their memberships contribution to the record profits of the rail carriers.
The National Carriers Conference Committee, which represents the nation's freight railroads in national collective bargaining, applauded Biden's move, saying it remained in the best interest of all parties.
The committee said that the railroads have worked thoughtfully to address issues raised by both sides and have offered pay increases that are consistent with labor market benchmarks.
The supply chain has been slowly recovering from the backlogs and delays that became common during the Pandemic because of worker shortages at the ports, trucking companies and railroads.
Edward Jones analyst Jeff Windau said it was in everyone's best interest to avoid a strike.
A group of railroads and unions expressed optimism that the new presidential board will be able to help resolve the dispute that began more than two years ago.
Business groups wanted Biden to make sure the railroads continued to operate. Businesses rely on railroads to deliver raw materials, finished products and imported goods and they worry about what a strike would mean. Railroad strikes could hurt the economy.
Hearings will be held with both sides to learn more about each other's positions before the board makes its recommendation about a month from now. The unions and the railroads have 30 days to negotiate a new deal before a strike can be allowed under federal law.
The two sides are far apart because workers want raises that will offset inflation and cover increased health insurance costs while reflecting the current nationwide worker shortages. Railroads maintain that the double-digit raises they are offering over the five year contract that would date back to 2020 are fair, based on the raises other companies gave their workers.
The railroads have been reporting record profits in recent years and the unions are expecting significant raises.
The unions want the railroads to back off their proposal to cut train crews from two to one and ease some of the strict workplace rules they have adopted in recent years.
If the railroads agree to a new deal they will be able to hire more workers. The major railroads have said they need to hire hundreds more workers to deal with the increased demand as the economy recovers and deal with the chronic delays and missed deliveries that have plagued their service this year.
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