The potential for a US rail strike is one of those risks that have the potential to throw another monkey wrench into the US economy.
Currently leaders from four railroad unions along with the management of the major US freight railroads are meeting to find a solution to the current labor agreement.
The workers rejected the 5-year labor agreements that were similar to one that were negotiated with 8 other rail unions recently. 51% of the union voted against the proposed deal sending representatives back to the drawing board.
The strike is set for December 9.
At stake is the US supply chain and in turn the US economy which uses rail for 30% of the nations freight.
The proposed deal would have included at 14% raise with back pay to 2020 and pay raises totaling 24% during the 4 year life of the contracts. The pay would give workers an average pay rise of $11K.
The pay is one side of the negotiations. The other more sticky side involves work rules involving scheduling, staffing levels and the lack of paid sick time. Workers want assurances for these quality of life issues.
The hope is the rail unions and management can work out the differences themselves without intervention from the government. However, if a threat of a strike does seem more likely, Congress may be forced to step in to block a strike. However, the unions oppose such actions since it takes power away from them and puts it entirely in the hands of the management.
In summary, the issues may cause some consternation and anxiety over the next few weeks. As time goes by and the clock ticks closer to the December 9 strike date, markets may have a negative reaction to the potential issues. Moreover, if the unions come out with gaining more, that could also be another inflation concern as other unions follow the same path toward higher and higher wages and labor concessions.
