The American economy is in danger of facing the biggest worker strike in 30 years. The largest unions of workers of the American railroads put forward an ultimatum to the companies involved in rail transportation, demanding higher wages, more vacation days and better insurance conditions for employees, writes the Financial Times. If at least one of the unions fails to agree with the companies on improving conditions, public organizations threaten to strike about 115,000 employees of the railway companies, the Associated Press notes.
To date, 10 out of 12 unions have agreed with their employers to improve working conditions. American Railroads estimates that one day of strike will cost the US economy $2 billion. The deadline for negotiations is Thursday: if the demands of the unions are not satisfied by this time, then the employees of the railway companies will go on strike.
Almost the entire economy will suffer from the collapse of rail transport. Representatives of almost all industries have already sent a demand to Congress with a request to intervene in the negotiations in order to prevent a new collapse of the recently restored logistics. According to US law, Congress has the right to intervene in disputes between business and trade unions if it threatens the economy, in which case arbitration is held, the FT notes.
“Jobs will be lost and costs will rise as shortages of raw materials and consumer goods reverberate throughout the economy – it will be a double whammy,” said Brian Dodge, president of the Retail Leaders Association.
According to him, the railroad strike may have an additional inflationary effect. According to the latest statistics on inflation in the US, it is still ahead of forecasts. On Tuesday, September 13, this led to the worst crash in US stock markets since 2020. High inflation means higher rates from the Federal Reserve System (Fed), which in turn increases the risks of a recession in the US economy.
At the same time, analysts do not believe that Congress will allow a giant strike. They believe that he will intervene if unions and business cannot agree on their own. However, such a decision will in any case have a negative effect on the economy, they argue. The unions are pushing for an immediate 14% increase in average wages, more vacation days, and better insurance for railroad workers. They insist that over the past six years, including during the pandemic, companies have reduced up to a third of the staff, and after the economic recovery, the losses were not made up, as a result of which the increased burden fell on the shoulders of the remaining employees.