Bound by the terms of a pre-COVID-19 pandemic contract, railroad workers have felt overworked and undercompensated in recent years.
Having come within hours of a railroad strike, workers are now set to vote on a tentative contract. The major sticking points in the railroad union negotiations were pay, sick leave, and schedule flexibility.
Some workers still don’t feel like their needs have been met. Unions’ ways may be the reason.
The stated goal of unions is to define the rules of all things worker-related within a company. That includes not only compensation packages, but also the physical workplace and the machines and administrative systems with which they interact. That gives unions significant power over companies’ entire operations.
- Starting with pay: Unionized workers’ pay is determined by multiyear contracts, and each contract negotiation can take months or years. The latest railroad contracts are based on contract negotiations that began in 2014 and ran through 2019. The latest contract negotiations opened in 2020 and have been going on for nearly two years. This means that railroad workers haven’t had a pay raise since 2019.
During that time, many non-unionized workers received significant pay raises due to a labor shortage caused by policies such as generous and easily accessible unemployment insurance bonuses that forced employers to pay more to get workers to show up.
Even those raises have now been reversed by out-of-control inflation: Between January 2021 and August 2022, the average worker’s annual wages increased by $3,600, but inflation has eaten away $6,600 of value, leaving the average worker $3,000 poorer, despite big pay increases.
Railroad companies would almost certainly have raised compensation to maintain the workforce they needed, but they’ve been locked in by union contracts that prevent them from increasing workers’ pay—or any other benefits—until a new contract is reached.
The lack of flexibility to respond quickly to changing circumstances and conditions has almost certainly hampered railroad companies’ ability to find workers throughout the pandemic.
The tentative deal includes an immediate 14% pay increase that will rise to 24% by 2024 and $1,000 annual bonuses over each of the next five years, bringing the average railroad worker’s annual pay to $110,000 by 2024.
- Sick leave and scheduling: Like most other workers, railroad workers should be able to take paid time off when they are sick and should have some flexibility in their schedules. But unions’ chokeholds on all things workforce-related make it extremely difficult and costly for railroads in particular to provide sick leave.
If the people running trains don’t show up for work, the trains can’t run, which is enormously costly and disruptive. So, it’s important that railroad companies have a way to cover for workers who are out sick or on vacation.
One option is asking workers who have days off to come in and work overtime, but unions control overtime and typically stipulate precise rules that allow them to reward the workers they want, such as by specifying the order in which workers must be offered overtime.
Another option is to use temporary or contract workers to cover for workers who are out. My veterinarian’s office does this by hiring “relief doctors” to cover for those doctors who are sick or on maternity leave. But unions generally prohibit the use of contractors. The alternative of keeping relief workers on full-time payrolls would be extremely costly and inefficient, ultimately bringing down full-time workers’ wages.
The tentative deal includes one day of personal leave, but workers wanted 15 sick days.
- Flexibility: Even prior to the COVID-19 pandemic, employers were adding flexibility as a way to attract and retain workers amid a tight labor market. The pandemic vastly expanded workplace flexibility such that it’s become commonplace across many different industries.
For railroads, it’s harder to provide flexibility for workers who are performing essential jobs, but there’s likely room for improvement. Nurses, for example, can often work within hospital systems to get someone to cover their shift if they’re out sick. And Walmart has an employee app that allows workers to trade shifts or find workers willing to cover for them. But unions typically insist on having control over schedules and scheduling systems.
The tentative contract is said to ensure that workers won’t be penalized for taking time off for illnesses, doctor visits, or hospitalizations, but it’s unclear whether any further flexibility has been added.
Across the workforce, unions’ rigid rules have prevented many unionized employers from responding to changing circumstances throughout the COVID-19 pandemic. That rigidity and labor shortages likely contributed to railroad workers’ complaints about being overworked and undercompensated throughout the pandemic.
When employers’ hands are mostly tied on workforce issues and they only have opportunities once every three or more years to address new circumstances and needs, it’s hard for companies to meet their workers’ and their customers’ demands—especially with a shock like COVID-19.
For example, amid pilot shortages leading to canceled and delayed flights, American Airlines initiated a voluntary program that offered pilots additional pay to come in on their days off and help train new pilots. The pilots union responded by suing American Airlines for offering work and wages to pilots outside of the unions’ control. American subsequently, and reluctantly, canceled all flight routes to three airports in Ohio and New York.
Meanwhile, contract negotiations are ongoing at West Coast ports, with the potential for another slowdown to the supply chain. California’s southern ports—which are ranked dead last in the world for efficiency—wreaked havoc on supply chains last year.
The logical solution would have been to improve their efficiency and expand operations. But a major sticking point in ongoing negotiations is that the unions vehemently oppose automation, despite evidence that it would drastically improve efficiency, reduce emissions, and likely lead to even more port jobs.
Unions have served an important role historically, but their failure to adapt to the ever-changing world of work and their propensity to act like they own workers rather than serve them have resulted in unions often hurting workers.
Workers have a right to organize and bargain for what they desire, but they should not be forced to pay for services they don’t want. Policymakers should protect workers’ rights to choose whether or not to join a union via right-to-work laws and should end “exclusive representation” so that unions do not have to represent workers who don’t want their representation.
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