In the News: Railroad Strike Averted

N. Rodgers: Hey Aughie. J. Aughenbaugh: Morning, Nia. How are you? N. Rodgers: I'm good. How are you? J. Aughenbaugh: I'm good. N. Rodgers: Have you been working on the railroad all the live long day? Do you remember that song when we were kids? J. Aughenbaugh: I do remember that song. The reason why listeners, Nia asked me if I remember the lyrics of that song is that we're going to do in the news episode about the recently averted railroad strike in United States and l use the verb averted, avoided because when we initially thought about doing this episode, there was a really good chance that the railroad system in United States was going to come to a screeching halt Nia because why? N. Rodgers: Strikes. J. Aughenbaugh: Strikes. N. Rodgers: Well, actually really, because of a breakdown in negotiations between the 456,000 unions that make up railroad workers and the 10 trillion companies that run railroads. Actually, I think it's what? Twelve? J. Aughenbaugh: There are 12 really large labor unions representing railroad workers in United States. N. Rodgers: Then there's a whole bunch of companies on the other side of the negotiating table. What are the things that would have caused this strike I think was negotiations were breaking down. They get some people on board with some stuff but not other people and guess what folks? All 12 have to agree, all of them. You try to get 12 people to agree where to go to dinner when you're out with friends. Good luck with that. That did not seem like it was going very well. This negotiation has been going on for a long time. I think it's been going on for more than a year. J. Aughenbaugh: To give this context for our listeners who might have seen news articles and flashes on their phones and computers, as far back as this summer, the Biden administration got involved with trying to broker a deal between the railroad companies and the 12 largest unions representing railroad workers. There were a number of issues, but one of the most significant issues was the following; scheduling policies. Rail workers were complaining that railroad companies were not allowing them to take time off for personal activities, major life milestone events like wedding anniversaries, funerals, birthday parties. But more problematically, sick time was the huge one. Some of the companies were actually saying to railroad workers, if you don't show up to work, you may not have a job when you return. As recently as the week of Thanksgiving, five of the 12 unions were threatening to go on strike. N. Rodgers: Well, imagine if you were on call 24/7, which is basically what we're asking these folks to do. You can never be sick, you can never be out. If we need you, we need you. Then of course, after a while that would be grueling and horrible on anyone. Anyone would say, well then you need to pay me $10,000 an hour because this is exhausting. This is making me old before my time. J. Aughenbaugh: The reason why Nia the Biden administration was involved was if the railroad workers went on strike and the railroad shut down, it would have had a huge impact on the nation's economy. N. Rodgers: I was going to ask you what's the percentage of stuff transported by railroad? J. Aughenbaugh: Over 16 percent of all goods sold in United States are shipped via railroads. N. Rodgers: That's huge. That's a huge amount of stuff. J. Aughenbaugh: The percentage goes up for imported goods. N. Rodgers: Came from the coast to the middle of the country. J. Aughenbaugh: I hope not to get too involved with my explanation of this. But for listeners, a good way to think about this is, let's say an automobile is made in Japan and is shipped by boat to the United States. N. Rodgers: Doesn't fall off the boat. J. Aughenbaugh: It doesn't fall off the boat. N. Rodgers: Which apparently happened. J. Aughenbaugh: But sometimes it happens. But more than likely, it will arrive in the Port of Los Angeles. N. Rodgers: Or to the Port of Long Beach, which is right next door. J. Aughenbaugh: Right next door. Two of the largest ports in United States. At that point it will more than likely first be shipped in United States via railroad car before it gets back. N. Rodgers: Because that car's being sold in Kansas? J. Aughenbaugh: Yes. N. Rodgers: You put it on a railroad car, it goes to Kansas, and then in Kansas, a guy gets it off the railroad onto a truck and delivers it the last 10 miles to the dealership. J. Aughenbaugh: To the dealership. N. Rodgers: You go in and say, hi, it's right here on the lot, like magic and you drive it home and it immediately depreciates. J. Aughenbaugh: But in particular, the timing of this strike would have been horrendous. N. Rodgers: Right before Christmas? J. Aughenbaugh: Yes. You're talking about Christmas merchandise so that's the seasonal. But what I also came to find out with my research Nia is things like coal, which is essential for winter heating still in various parts of the United States, almost all of it gets transported at least initially from the mines on railroad cars. I see this because near my house when I'm driving to work, I cross over railroad lines, and quite a few mornings I actually see railroad cars full of coal. N. Rodgers: You never see a truck full of coal? J. Aughenbaugh: Yeah. N. Rodgers: That is the way that you get it from one place to another. Coal is dirty. J. Aughenbaugh: Yes. N. Rodgers: It's dusty and it's hard to transport. It's easier for them to put it in a train and send it in these open top cars, where they send it off to various. If you think power companies don't run on coal, you silly, silly person, you should rethink that because they do. A lot of power companies use coal as part of their electrical generation. J. Aughenbaugh: Even though we've been weaning off the use of coal. N. Rodgers: We're not there yet. J. Aughenbaugh: We're not there yet. N. Rodgers: Ask West Virginia. J. Aughenbaugh: Overall Nia the impact per day it was estimated by industry groups and even the Biden administration to be roughly $2 billion a day. That would have been a billion. N. Rodgers: A billion and above. J. Aughenbaugh: Yes. If you think, inflation is bad now. N. Rodgers: That would be pretty awful if we were just burning $2 billion a day. That meant that there were some real pressure to deal with this. J. Aughenbaugh: Yes. N. Rodgers: Like if you were talking about this huge economic effect, then you have some real pressure to, well, we got to get this enlightenment. J. Aughenbaugh: Next question, and I got asked this with some regularity was, well, why did the Biden administration just not step in and say x is going to happen? Well, because the Biden administration one, doesn't have the authority in the Constitution, but two, doesn't have the authority in law. N. Rodgers: Wouldn't that be essentially nationalizing the railroad lines? J. Aughenbaugh: Very good. Under the Railway Labor Act of 1926, which was amended in 1934 and 1936, labor disputes in regards to railroads are supposed to be enforced by the Federal Board of mediation. The act does not authorize the president to take over and keep open either the railway or airline industries. It does allow the president to participate via the board of mediation whose members are actually appointed by presidents. J. Aughenbaugh: But technically, the only way to solve this dispute if owners in labor can not come to agreement is Congress doing what, Nia? N. Rodgers: I'm assuming passing something that says and this shall be the way that this is handled. J. Aughenbaugh: That is correct. Nia, that's based on what constitutional authority? N. Rodgers: I'm assuming, since it's your favorite, it's the Commerce Clause. In this particular instance, it makes sense two billion dollars a day instead. That's some serious commerce right there. It's across state lines and it's clearly. Normally I would first with you and say this clearly falls under commerce. But what I think is interesting is I know that there were people who were saying, well, do to them what you did to the air traffic controllers, just fire them all and then hire more people to do the job and get the trains moving again. But part of that is that weren't more air traffic controllers, federal employees to start with. J. Aughenbaugh: They were technically employees of the FAA; the Federal Aviation Administration. N. Rodgers: There's rules about whether federal or government employees can strike or not. There's moves about that. J. Aughenbaugh: That's right. N. Rodgers: That's part of why they couldn't just say, well, fine, then we'll just find a whole bunch of other conductors and folks to do whatever. J. Aughenbaugh: I got asked that question quite a bit too Nia and I'm like, guys, fundamental difference. N. Rodgers: Federal employee versus private employee. J. Aughenbaugh: Yeah, public versus private. Public employees only get the right to strike if the legislative body in their jurisdiction give them the legal authority to do so. All right? N. Rodgers: Okay. J. Aughenbaugh: Because again, public employees, many of which are doing are central jobs. N. Rodgers: Can't just wander off the job, even if they have good reason to strike. J. Aughenbaugh: Even if they have really poor labor conditions, we can't run an airline industry without air traffic controllers. N. Rodgers: We can, but it won't last forever. J. Aughenbaugh: Oh, it would get messy. N. Rodgers: It will get messy quick. That puts Biden in a pretty terrible position. Because he could theoretically nationalize the railroads, but then we're no longer the United States, we're Venezuela. We run into the problems of democracy. You can't claim being the world's premier capitalist venture and then just nationalize something when it's not going well. Isn't that the other question is why don't you just nationalize the railroad lines, and the answer to that is, oh my goodness, because then we're not really a democracy and the way we think of democracy. J. Aughenbaugh: Well, we're not a capitalist democracy. Nia, your point really captured the proverbial rock and a hard spot that the Biden administration was in. On one hand, Joe Biden has said, and I'm not being sarcastic when I say this. The Biden administration has claimed it is and will be the most pro-union presidential administration in decades. N. Rodgers: Joe like I'm his friend. President Biden himself has suggested that he is the Amtrak president because he used to ride back and forth on the Amtrak every day from where he was living to DC because he had to take care of small children after his wife died. He's especially tied to railroads and the railroad unions. You can't let two billion dollars of economic stuff not happen every day in the United States. J. Aughenbaugh: That would have irreparable harm to the economy. N. Rodgers: Catastrophic effect. J. Aughenbaugh: Right before Christmas. N. Rodgers: Well, and winter. If you're talking about winter clothing and you're talking about coal for heating, the carry-on effects of that are enormous. He's standing there between Scylla and Charybdis trying to figure out what to do. J. Aughenbaugh: We don't know what political impact that's going to have. But again, listeners at the time of the recording, less than a week before the United States Congress passed a law and President Biden signed it or passed a bill and President Biden signed it into law that basically imposed the deal that was negotiated in September, which means that these five large labor unions in the railroad industry are basically forced to accept a deal that they didn't like. N. Rodgers: But they weren't going to get a good deal. Congress was not going to let this go. They were not going to let a strike start because two billion dollars a day, that's going to hurt every single member of Congress. They were going to do something. Maybe taking what you could get in a decent negotiation with Congress and then trying to work on more, I don't know. Is that where they came down? J. Aughenbaugh: Well, as we both pointed out earlier in this episode, Nia, as far as these five unions are concerned, the deal that was negotiated that it's now actually codified into law, still does not address their primary concern. A point system in regards to time off. That gives them very little time off, and it's affecting their physical and mental health. If we're so essential to the nation's economy, why aren't you all concerned about our physical and mental health? N. Rodgers: Why don't you give us pay sick leave? J. Aughenbaugh: I know what they were thinking but if they thought the United States Congress was not going to step in and avert a railway strike the month before Christmas, and again unless they're willing to politically punish the President and members of Congress in upcoming elections, they had to know that President Biden was not going to allow another period of supply chain shortages to occur. He doesn't want to run for re-election if he runs for re-election in 2024 by saying, hey, I'm the inflation president. He was going to go ahead and take steps to make sure that we didn't have another repeat of what he encountered his first three, four months on the job, which is he takes office, and all the supply chain shortages of the pandemic basically just hit all at once. He just wasn't going to let that happen. N. Rodgers: He's really going to let two billion dollars a day fall out of the economy? Well, he's just not. J. Aughenbaugh: He's not going to. N. Rodgers: In fairness to him as president, what he's doing is sacrificing the fee for the money. J. Aughenbaugh: Yes. N. Rodgers: Which is not an uncommon risk management technique in government is to say, how many people will this hurt, but how many people will it help? Corporations do that all the time. J. Aughenbaugh: But in terms of historical narrative, this is yet one more time where railroad workers got the shaft. This is an industry that was built on the backs of labor, many of whom were immigrants; non-US citizens many died. N. Rodgers: In the first railroad across the United States, Chinese workers were allowed in slash brought in to do the work died doing the work and weren't given citizenship. J. Aughenbaugh: Afterwards. N. Rodgers: It started scurrying from the beginning. J. Aughenbaugh: Then later on the United States actually passed immigration laws that allowed no Chinese nationals to come into the country. This is known as the Chinese Exclusion Policy. Once the railroads were built, labor was mistreated. N. Rodgers: Well, and now they're on call all the time. They have these conditions where they work physically very hard for 10,12 hours a day sometimes and they're on three or four days in a row then they get a day off and they are three or four days on. We're talking about a lot of backbreaking labor. J. Aughenbaugh: Many of them have to travel a half-hour, 45 minutes, an hour, and if they're sent to a remote location, their per diems are not large enough to cover hotel rooms and meals. They might actually lose money if they have to go on the road to fix a line or to repair or switch, etc. N. Rodgers: Remember listeners that the vast majority of railroad tracks in this country are not where people are. J. Aughenbaugh: Correct. N. Rodgers: They're not easily gotten to. You have to go off-roading to get to some of them because that's the whole point of having a railroad system. It's between cities. It's between centers of population. J. Aughenbaugh: When they enter densely populated areas because of safety concerns. J. Aughenbaugh: The tracks are usually outside of population areas, within urban areas. Because again, a lot of the goods that are shipped on rail lines can be hazardous if there is a train derailment. N. Rodgers: We don't want this thing to explode with this much [inaudible] J. Aughenbaugh: Methane gas. Yeah, etc. To get to those tracks is extremely difficult. N. Rodgers: As you can tell, Aughe, and I have a lot of sympathy for the railroad workers because the intensity of their work, I personally think they should get paid sick time, right? J. Aughenbaugh: Sure. N. Rodgers: I don't think we should use people's bodies in their labor and not compensate them for that in some way. They do need to come back and fix this negotiation. Like they need to come back and say, okay, now that we're past, I don't know, whatever this crisis point is, we need to sit down with all the companies and you-all need to make some decisions about how we're going to improve the lives of these workers. This needs to not be a thing that only comes up when they threaten to strike. J. Aughenbaugh: Making policy by crisis is usually not the best way to make policy. The percentage of goods in the United States that are shipped via railroads has not shrunk. It's basically remain fairly constant over the last roughly 2-3 decades. We know this industry is essential to the American economy. Not addressing this long term does not strike me as good public policy. N. Rodgers: If you're an environmentalist and you want to see more light rail, you need to address this because light rail and heavy rail share the same line. J. Aughenbaugh: Yes. N. Rodgers: Amtrak was looking at shutdowns because the lines were going to be shut down because, guess what? When you stop trains for moving, they got to be parked somewhere. There's only semi spacing the rail yards, and then you would have trains just out on line waiting to be moved again. There would be no way for Amtrak to get through even if they were still running. Also Amtrak rents lines from private to the groups they have paid for them and built them in [inaudible]. J. Aughenbaugh: By law passed by Congress, Amtrak gets first dibs during peak hours. But now you're talking about the trickle-down effects, because a lot of people, particularly in the heavily populated northeast region of the country, travel to work on Amtrak. N. Rodgers: Right, via train. J. Aughenbaugh: As they can't travel to work or now they're getting in the automobiles. N. Rodgers: Now more cars on the road, more smog, more gas prices going up because more usage and there's a whole lot of carry on effects. Do you think that they'll come back and negotiate more? J. Aughenbaugh: Oh, that's hard to predict Nia. I mean, because I really thought that the five unions would have accepted the deal that was negotiated. But again, Congress is so closely divided, with the one house controlled by the Republicans and the other controlled by the Democrats. I don't know if this is an issue that's going to motivate them to actually work together. I would hope that it does. I mean, again, this is 16 percent of the nation's economy, two billion dollars a day. N. Rodgers: How long does this act last? J. Aughenbaugh: I think it's the standard Labor Agreement Act, so it's like for three years. N. Rodgers: Okay. J. Aughenbaugh: Yeah. N. Rodgers: We've just basically taken this can picked it up and kicked it. J. Aughenbaugh: Yes. In the finest United States Congress tradition. N. Rodgers: I'll let that be someone else's problem. J. Aughenbaugh: I can get re-elected in 2024 and then we can deal with this in 2025. Yeah. N. Rodgers: Okay. We'll be hearing about this again then? J. Aughenbaugh: Oh, sure we will. Because again, these are such important work life issues for these workers. You're going to miss a wedding anniversary, you're going to miss your child's high school or college graduation, you're going to put off going to the doctor for that persistent ache in your back. I mean, at some point in time this has got to get addressed. N. Rodgers: I personally, and I know we want to keep this relatively short, so I won't go on at length. But I personally think paid sick leave should be a thing that every single person in the country has at their job. Because I don't want you to come to work sick. I don't want you to make me sick or our patron sick or, you know what I mean? It's a self-preservation thing. My boss is excellent about saying, oh, if you're sick, don't come here. Don't bring it here. Stay at home. I personally think that that's a dignity that every person who works in the United States should have. I know that there are limits to how you can do that with hourly employees, but these people aren't hourly employees, they're salaried employees. J. Aughenbaugh: Many of them are engineers and doctors, etc. N. Rodgers: It's crazy that they don't have paid sick leave. J. Aughenbaugh: Another point to add to that, there's voluminous human resource management scholarship that shows that when people come to work sick, their productivity is less. You're paying them to come to work but they're not working very well. N. Rodgers: Then they're going to make other people sick who aren't going to work very well. J. Aughenbaugh: I mean, from a management perspective, do I want hypochondriacs who are always looking for excuses not to come to work? No. But if we've hired good people who do good work, but then they get sick and we're not going to get the productivity, I want them to go ahead and go to a doctor and find out how they can get better so they can come back and do what? N. Rodgers: Be more productive. J. Aughenbaugh: I mean, from a simple productivity standpoint, it's good business, right? N. Rodgers: Yeah. J. Aughenbaugh: Okay. N. Rodgers: From a humanity point, it's good business. J. Aughenbaugh: Good business, yes. N. Rodgers: This happens to be one of those things that's good business on both sides. J. Aughenbaugh: Yes. N. Rodgers: It's a package that you can sell to people easier to get them to do jobs that aren't particularly ones that a lot of people want to do. J. Aughenbaugh: That's right. Yeah. Anyways, Nia. N. Rodgers: Well, in three years we'll talk about it again. J. Aughenbaugh: I hope not. N. Rodgers: Thanks, Aughe. J. Aughenbaugh: All right. Thanks, Nia. Bye. N. Rodgers: Bye.