{"id":16597,"date":"2022-09-19T10:16:18","date_gmt":"2022-09-19T14:16:18","guid":{"rendered":"http:\/\/ohiopeacecouncil.org\/?p=16597"},"modified":"2022-09-19T10:16:18","modified_gmt":"2022-09-19T14:16:18","slug":"strike-averted-now-nationalize-the-railroads","status":"publish","type":"post","link":"https:\/\/ohiopeacecouncil.org\/?p=16597","title":{"rendered":"Strike Averted, Now Nationalize the Railroads"},"content":{"rendered":"<p>The threat of a paralyzing rail strike was\u00a0<a href=\"https:\/\/www.nytimes.com\/2022\/09\/15\/business\/rail-strike.html\">narrowly averted on Thursday<\/a>\u00a0through last-minute labor negotiations by the Biden administration. There are many political and economic reasons to feel enormous relief (assuming the accord gets ratified by union rank and file). But it hardly means the nation\u2019s rail system is in good health.<\/p>\n<p>Before this week, most Americans probably had little idea that they remain so utterly dependent on rail freight; about one-third of all freight in the United States travels by rail. As much as that is, it isn\u2019t enough. To the extent rail freight could be made to displace trucks, that would greatly reduce America\u2019s carbon footprint. Trucks belch out\u00a0<a href=\"https:\/\/www.thirdway.org\/memo\/freight-rails-role-in-a-net-zero-economy\">nearly 10 times<\/a>\u00a0as many greenhouse emissions per ton-mile as trains.<\/p>\n<p>But rail freight\u2019s market share isn\u2019t expanding; it\u2019s\u00a0<a href=\"https:\/\/www.bts.gov\/content\/us-ton-miles-freight\">shrinking<\/a>, and rail service is getting crappier, because the financiers who control the industry expect an obscenely high return on investment. At its heart, that\u2019s what this week\u2019s labor dispute was about. It\u2019s time to think about nationalizing rail freight.<\/p>\n<ul>\n<li><\/li>\n<\/ul>\n<p>The power flexed this week was that of labor, not management, making this look like a story about unions. And yes, the 12 rail unions involved in these negotiations, representing workers for Class I railway companies (the biggest), possess more clout than we\u2019re accustomed to seeing in the labor movement. Like dockworkers, rail workers are immune to the erosion of the U.S. manufacturing base because it doesn\u2019t really matter where the goods they move originated or where they\u2019re going. Consequently, like dockworkers, railway workers earn excellent pay. Last year, the median hourly wage for railway workers was\u00a0<a href=\"https:\/\/www.bls.gov\/ooh\/transportation-and-material-moving\/railroad-occupations.htm\">about $31<\/a>, compared to a median hourly wage for autoworkers of\u00a0<a href=\"https:\/\/www.bls.gov\/iag\/tgs\/iagauto.htm#earnings\">about $25<\/a>. Median total compensation (wages plus benefits) for the Class I railway workers affected by the new agreement is about\u00a0<a href=\"https:\/\/raillaborfacts.org\/total-compensation\/\">$130,000<\/a>. A railway worker in their twenties with only a high school diploma or a GED\u00a0<a href=\"https:\/\/money.cnn.com\/galleries\/2011\/pf\/1108\/gallery.surprising_six_figure_salaries\/10.html\">can bring home<\/a>\u00a0a six-figure salary.<\/p>\n<p>On Wednesday, Labor Secretary Marty Walsh convened the labor negotiations that produced the tentative agreement. I\u2019ve been\u00a0<a href=\"https:\/\/newrepublic.com\/article\/167657\/labor-marty-walsh-unions-biden\">critical<\/a>\u00a0of Walsh, but this is a clear victory for which he deserves credit, along with Deputy Labor Secretary Julie Su and the White House economic team, including President Joe Biden, who reportedly was involved directly in the negotiations. (Transportation Secretary Pete Buttigieg and Agriculture Secretary Tom Vilsack also played a role.) The agreement includes a 24 percent pay increase over five years plus a $5,000 bonus, and it\u2019s retroactive to 2020 because the rail workers have been working without a contract for three years.<\/p>\n<p>Money wasn\u2019t the sticking point. A Presidential Emergency Board\u00a0<a href=\"https:\/\/nmb.gov\/NMB_Application\/wp-content\/uploads\/2022\/08\/PEB-250-Report-and-Recommendations.pdf\">proposed<\/a>\u00a0the 24 percent pay hike in July. (The unions requested 31 percent, the railroads offered 17 percent, and the emergency board split the difference.) The point of dispute was that the railroads were imposing Dickensian work rules governing time off. Workers were required to be on call 24\/7. If they declined an assignment, they lost points. The workers started with about 30 points. If they took a sick day, they lost (according to\u00a0<a href=\"https:\/\/ble-t.com\/resc\/pdf_tey_attendance_072821.pdf\">a 2021 Union Pacific document<\/a>) between three and eight points. If they declined an assignment for some other reason, they lost 10 points. If they burned through all their points within a 90-day period, the workers were subject to disciplinary proceedings.<\/p>\n<p>The unions were demanding more predictable schedules. They were particularly incensed that workers were penalized for doctor visits and medical procedures\u2014during a Covid pandemic, no less. In the end, the railroads\u00a0<a href=\"https:\/\/apnews.com\/article\/rail-worker-strike-negotiations-updates-83c0f51db4a87bf632dafe589b328f4a?utm_campaign=TrueAnthem&amp;utm_medium=AP&amp;utm_source=Twitter\">agreed<\/a>\u00a0to an additional paid day off and to allow workers to go to the doctor or get a medical procedure done without having to forfeit points. The points system itself, though, remains in place.<\/p>\n<p>Perhaps you\u2019re wondering\u2014and if you aren\u2019t, you certainly should be\u2014why an industry that\u2019s supposed to pride itself on predictable schedules for train departures and arrivals can\u2019t produce predictable schedules for its workers. You probably have some quaint picture in your head\u2014perhaps the Stage Manager in\u00a0<i>Our Town,<\/i>\u00a0examining his pocket watch as Shorty Watkins, down at the depot, watches the Albany train pull in. Passenger service still operates like that (or is supposed to), but not freight. Freight schedules are pure chaos, and the railroads aren\u2019t willing to employ enough workers to make that chaos even minimally functional. Instead, the railroads cut the Class I workforce by 29 percent over the past six years, a\u00a0<a href=\"https:\/\/nmb.gov\/NMB_Application\/wp-content\/uploads\/2022\/08\/PEB-250-Report-and-Recommendations.pdf\">net loss<\/a>\u00a0of about 45,000 employees.<\/p>\n<p>The culprit is something called Precision Scheduled Railroading. PSR is a system dreamed up in 1993 by the late E. Hunter Harrison, who at the time was chief executive of CSX Corp., the legacy company of the old Chesapeake &amp; Ohio Railway. PSR isn\u2019t about predictable schedules. It\u2019s about moving freight cars on a just-in-time basis. The idea is that you move freight cars as they arrive in the depot, rather than waiting to accumulate a great many freight cars to move in a single, long train. \u201cThis approach eliminates variability,\u201d\u00a0<a href=\"https:\/\/www.up.com\/customers\/track-record\/tr091019-precision-scheduled-railroading.htm\">according to<\/a>\u00a0a Union Pacific P.R. document, \u201callows for more precise supply chain management, and results in more consistent transit times.\u201d<\/p>\n<p>If you like this article, please sign up for Snapshot, Portside&#8217;s daily summary.<\/p>\n<p>That\u2019s the theory. In practice,\u00a0<a href=\"https:\/\/nmb.gov\/NMB_Application\/wp-content\/uploads\/2022\/08\/PEB-250-Report-and-Recommendations.pdf\">according to<\/a>\u00a0the Presidential Emergency Board, since the advent of PSR, trains have gotten longer, averaging 9,500 feet as opposed to 7,000 feet, and nearly one-third less frequent. Shippers are paying more, and labor costs are falling as employment dips. Consequently, profits are up. Way up.<\/p>\n<p>PSR,\u00a0<a href=\"https:\/\/fortune.com\/2021\/07\/21\/peter-defazio-precision-scheduled-railroading-problems\/\">wrote<\/a>\u00a0House Transportation Committee Chair Pete DeFazio last year in\u00a0<i>Fortune,<\/i>\u00a0\u201cis not some fancy optimization strategy to increase freight volume or improve operations and reduce emissions; rather, it is a business strategy promoted by Wall Street to boost short-term profits.\u201d\u00a0The railroad companies have been Wall Street\u2019s plaything throughout their half-century decline. Financiers endlessly pull rail companies apart, recombine the pieces at random, and sell off rights of way whenever possible. (Those rail-to-trail bike paths don\u2019t come free.) The Class 1 railroad BNSF, for instance\u2014a.k.a. the Burlington Northern and Santa Fe Railroads\u2014is owned by Warren Buffett\u2019s Berkshire Hathaway. Even for a \u201cvalue investor\u201d like Buffett, who shuns PSR, running a railroad today isn\u2019t about moving freight; it\u2019s about pushing costs down and revenues up.<\/p>\n<p>The result has been that railroads\u2014<i>railroads!<\/i>\u2014were, as of 2019, the most profitable industry sector in America,\u00a0<a href=\"https:\/\/ajot.com\/news\/railroads-are-usas-most-profitable-industry-with-a-50-profit-margin\">according to<\/a>\u00a0the\u00a0<i>American Journal of Transportation,<\/i>\u00a0with a profit margin of 51 percent. By comparison, real estate (the selling of the world\u2019s most finite resource, land) ranked number two at 41 percent, and tobacco (an addictive substance) was number three at 31 percent.<\/p>\n<p>Railroads are more profitable than the banks that control them. But to be clear, it\u2019s the banks that are in charge, not the railroads. The trains are an afterthought.<\/p>\n<p>Since 2004, railroad profits have increased\u00a0<a href=\"https:\/\/nmb.gov\/NMB_Application\/wp-content\/uploads\/2022\/08\/PEB-250-Report-and-Recommendations.pdf\">676 percent<\/a>\u00a0and railroad stock prices have increased\u00a0<a href=\"https:\/\/nmb.gov\/NMB_Application\/wp-content\/uploads\/2022\/08\/PEB-250-Report-and-Recommendations.pdf\">1,250 percent<\/a>. This is the sort of return more commonly associated with criminal enterprises. \u201cProfit margins can\u2019t rise further,\u201d\u00a0<a href=\"https:\/\/www.washingtonpost.com\/business\/energy\/railroads-get-off-track-in-obsessing-about-profit-margins\/2022\/08\/03\/9fe7d5ae-1324-11ed-8482-06c1c84ce8f2_story.html\">wrote<\/a>\u00a0Bloomberg Opinion columnist Thomas Black last month, \u201cwithout inflicting even more damage on customers and workers.\u201d That was Bloomberg Opinion talking, not the\u00a0<i>Daily Worker.<\/i><\/p>\n<p>Philip Longman of the Open Markets Institute\u00a0<a href=\"https:\/\/www.openmarketsinstitute.org\/publications\/statement-how-to-fix-the-railroad-crisis\">points out<\/a>\u00a0that the federal government didn\u2019t just stand by when the nation\u2019s railroads were built back in the mid-nineteenth century. Taxpayers subsidized their construction in exchange for charters requiring railroads to serve all customers on equal terms. Today these charters go unenforced. The Interstate Commerce Commission, which President Bill Clinton closed down in 1995, regulated train routes and schedules, something that President Jimmy Carter decided was unnecessary when he deregulated trains along with airplanes and trucks in the 1970s. It was an interesting experiment. It failed.<\/p>\n<p>Writing last year in\u00a0<i>The Washington Monthly,<\/i>\u00a0Longman\u00a0<a href=\"https:\/\/washingtonmonthly.com\/2021\/11\/07\/amtrak-joe-vs-the-modern-robber-barons\/\">suggested<\/a>\u00a0that the railroads might be ripe for nationalization. There\u2019s a precedent for doing so in times of national emergency, which is a fair description of our current climate crisis; President Woodrow Wilson nationalized the railroads during World War One. Alternatively, Longman suggests, we could nationalize only the tracks. That would not, he noted, be \u201call that different from how the Interstate Highway System works.\u201d America\u2019s train tracks are in terrible shape. If the federal government acquired them and then brought them up to the level of U.S. highways, maybe high-speed passenger rail, a technology widely available in Europe and Japan for four decades, could finally arrive on these shores. (Don\u2019t talk to me about Amtrak\u2019s Acela, which theoretically can do 150 mph but typically travels from Washington to New York at\u00a0<a href=\"https:\/\/www.washingtonian.com\/2018\/05\/09\/acela-really-high-speed-train\/#:~:text=Why%20is%20the%20Acela%20so,freight%20and%20local%20commuter%20lines.\">a poky 70 mph.<\/a>)<\/p>\n<p>Clearly, we\u2019ve got to do something. This week\u2019s rail crisis provided a window on how dysfunctional the American railroad industry is. By the time Wall Street\u2019s done picking over the bones, there\u2019ll be nothing left. Labor\u2019s threat to shut down rail freight was a cry for help. Let\u2019s save our railroads while they\u2019re still there.<\/p>\n<p>(from The New Republic, 9\/16\/22, by Timothy Noah)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The threat of a paralyzing rail strike was\u00a0narrowly averted on Thursday\u00a0through last-minute labor negotiations by the Biden administration. There are many political and economic reasons to feel enormous relief (assuming the accord gets ratified by union rank and file). But it hardly means the nation\u2019s rail system is in good health. Before this week, most [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":16599,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1,42],"tags":[],"class_list":["post-16597","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","category-union-rights"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=\/wp\/v2\/posts\/16597","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16597"}],"version-history":[{"count":1,"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=\/wp\/v2\/posts\/16597\/revisions"}],"predecessor-version":[{"id":16598,"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=\/wp\/v2\/posts\/16597\/revisions\/16598"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=\/wp\/v2\/media\/16599"}],"wp:attachment":[{"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16597"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16597"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ohiopeacecouncil.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16597"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}