Biden Calls On Congress to Avert Railroad Strike – How Much Could a Shut Down Cost Americans?

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President Joe Biden called on Congress to quickly pass a tentative agreement between railroad workers and operators – without any modifications or delay – “to avert a potentially crippling national rail shutdown,” which could start Dec. 9. A potential strike could wreak havoc on holiday plans, disrupting supply chains and crippling commuters.

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“A rail shutdown would devastate our economy. Without freight rail, many U.S. industries would shut down. My economic advisors report that as many as 765,000 Americans – many union workers themselves – could be put out of work in the first two weeks alone. Communities could lose access to chemicals necessary to ensure clean drinking water. Farms and ranches across the country could be unable to feed their livestock,” Biden said in the statement.

The agreement, approved by labor and management negotiators in September, provides a 24% pay raise for rail workers and improved health care benefits, according to Biden’s statement.

However, only eight of the 12 labor unions membership have fully agreed to contracts forged in part by the leadership of the Biden Administration, according to The Association of American Railroads (AAR).

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Following the announcement that a fourth rail union rejected the tentative agreement, the National Retail Federation (NRF) raised concerns about the potential strike’s devastating impact on the economy during the holiday season.

“Millions of hardworking Americans rely on the freight rail system for their jobs and the economic security of our country,” NRF president and CEO Matthew Shay said in a press release. “A nationwide rail strike during the peak holiday season will be devastating for American businesses, consumers and the U.S. economy.”

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CNN reports that a freight rail strike could cost the economy $1 billion in its first week alone, according to a new analysis from the Anderson Economic Group. “Calculations show a first-day impact of approximately $60 million, including $30.9 million for lost freight, $3.8 million for long-term passenger rail disruption and $25 million in lost railroad industry wages,” according to the analysis.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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