On Monday, Workers at the SMART-TD union narrowly voted to reject a tentative contract. The 28,000 member union, joins three others who voted to reject the deal. Meanwhile, seven unions, including the Brotherhood of Locomotive Engineers and Trainmen, voted to accept the contract.
The original contract included a 24% compounded wage increase over five years and five annual $1,000 lump sum payments.
Many unions voted against the contract over its sick day policy as it only offered one day of sick pay despite the unions asking for 15.
It is clear that operators are unwilling to offer extra sick pay as it would lead to them hiring more staff. This would increase their costs during a period when rail operators are looking to trim budgets.
Earlier this year, President Biden had brought together a committee to make suggestions for an agreement. The committee suggested that the new contract include increased pay, which was accepted by union negotiators but rejected by members.
Following a break-down in talks, a Republican-majority Congress may now have to get involved. This may prove problematic for unions as Republicans have historically favoured businesses during union disputes.
The strike could happen as soon as December 5th , following a cool-down period for unions after their rejection. This limits the amount of time that lawmakers have to work to get to a deal after the Thanksgiving recess.
In light of this, Reliant Labor Consultants principal Joe Brock, a former Teamsters local president said, “The union needs to get this done in advance of the new Congress." Further, he explained, "I see a minimal improvement in sick pay, and huge pressure from the (Biden) administration to accept a deal."
If the strikes were to go ahead this could have disastrous effects on coal shipments, passenger travel, drinking water and could cost the economy as much as $2 billion per day.
On Monday, Reuters reported that strike action could freeze up to 30% of U.S cargo by weight and could increase inflation further, putting pressure on an already struggling economy.
The danger of this was highlighted last week when the U.S. Chamber of Commerce asked Congress to step in to stop the disruption. Meanwhile, Automaker General Motors said that strike action would force factories to close within a day.
If some unions move forward and choose to strike, unions who have voted to accept the deal pledged to honor the picket lines. This could see hundreds of thousands of workers striking over the festive period and passengers could face serious disruption.
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