PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Letter to GOP Leader McConnell on Rail Strike Legislation

By at 1 December, 2022, 10:39 pm

The Honorable Mitch McConnell
Republican Leader
U.S. Senate
Washington, D.C. 20510

Dear Leader McConnell:

On behalf of the eight undersigned organizations, we urge you support only the House-passed legislation to prevent an economically crippling strike on the nation’s railways. The
Senate should also avoid the temptation to micromanage this issue and reject any other
legislation that would alter the tentative agreements themselves.

As organizations that support free markets, we are all reluctant to become involved in the
policy intricacies of private negotiations between management and labor. The Senate
should likewise exercise caution with intervening in the private sector economy under the
pretext that a critical function is imperiled. Unfortunately, the federal government has
already intertwined itself in this dispute, leaving us with choices that are unappetizing to
one degree or another. The most palatable option is to immediately implement, for the
remaining four holdouts, the tentative agreements that eight of the twelve railway unions
have already ratified.

Absent congressional action, a national strike on the railways would cripple an already
teetering economy. Estimates vary on the costs of this work stoppage, and range from the
tens of millions to the low billions per day. Whatever the actual damages might amount to,
they would certainly be considerable. After all, railroads haul about 28% of the nation’s
freight on a ton-mile basis. Other critical inputs for manufacturing such as coal, timber,
grain, and chemical ingredients are all usually shipped by train. This would lead to another
major supply chain shock similar to, if not worse than, the empty shelves experienced in
2021.

This June, railway unions expeditiously left mediation with rail companies and began to
threaten national strikes. After significant public pressure, President Biden finally
convened non-binding arbitration talks with a Presidential Emergency Board that
performed fact-finding and held hearings from both sides. These talks resulted in
recommendations that became tentative agreements.

These tentative agreements substantially increased wages, health care, and paid time off
for all railway employees. In fact, if just those TAs were enacted, the average railway
employee would be higher paid than nearly 90% of the country. At an average of $126,000
in total compensation per employee, that’s nearly double the 2021 median household
income, and almost 30% more than the 2021 average household income. Rail workers would
also continue to receive platinum health care benefits with 85% of the cost paid for by their
employers. On top of that, their paid leave would be increased by a day from its current 3
weeks of vacation and 14 days personal leave.

Again, while the particulars of negotiations are less a concern among the signatories, by
most accounts this is a great deal for railroad workers. Even Ivy League academics like
Cornell’s Art Wheaton believe it’s a good agreement, stating “They got everything that they
were asking for, for the most part.”

If the remaining unions cannot come to a voluntary arrangement prior to a strike, we urge
the Senate to take properly measured and prudent action for the sake of consumers,
taxpayers, and the U.S. economy. Limited steps such as this one now should be viewed as
necessary to prevent even more intrusive federal government actions later.

Signed,
Saulius Anuzis, President
60 Plus Association

Steve Pociask, President & CEO
American Consumer Institute

Gerard Scimeca, Chairman
Consumer Action for a Strong Economy

Brian Minnich, Executive Vice President
Freedom Foundation

Charles Sauer, President
The Market Institute

Pete Sepp, President
National Taxpayers Union

Karen Kerrigan, President & CEO
Small Business & Entrepreneurship Council

Mike Stenhouse, CEO
Rhode Island Center for Freedom & Prosperity

 

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