joining us now to discuss is Christine Mcdaniel. She's
a senior fellow at the Mercatus Center. So thank
you so much for joining us, Christine. What
is the tentative deal and what what do you think
it will help to do to get things back on
track and prevent further disaster? So this is a
, this is a big deal uh, in a
big sigh of relief for a lot of people in
the, in the shipping industry. But also a
lot of farmers that rely on rail. Um,
and and not to mention just, you know,
the big commodity movers. Rail is really good at
moving big, heavy bulk bulk things like, you
know, ag and fertilizers. Um, So,
but So we have, you we usually have rail
strikes. You usually see them looking at history like
every few decades or so. They used to get
really violent back in the late 1800s, early 1900s
. But then in early in the early 90s,
President Bush and Congress just decided, well, let's
get an arbitration panel to, you know, try
to avert these violent and disastrous strikes. So that's
what, you know, has been happening the past
couple of months. This arbitration panel that President biden
appointed, uh, supposed to be neutral. They
go in and try to talk to both sides and
figure it out. The arbitration arbitrators got a pretty
good deal on wages. That that good. I
mean, because both sides liked and both sides agreed
to it, but they didn't quite work out.
The nitty gritty on the paid leave policies, Sick
time time off, Things like that, which was
apparently very important To these rail workers, you know
, they can't really work from home. So like
a lot of us can, so, so they
were really holding out for more for a better deal
on the leave policy. And it looks like that's
what I was able to be accomplished these last,
you know, that during that 20 hour negotiation period
. Now, I know you mentioned some of the
concerns, especially, you know, remote work isn't
really possible for a lot of these rail workers,
But what are the big sticking points between workers,
the unions and the railroads? Well, the big
sticking point? Well, one was wages of course
. Um and they got, like I said,
they the, well the the unions wanted something,
um something up here, the carriers were offering something
done here and the arbitrators basically split it in the
middle, the workers, they were really concerned about
their time off. And this gets really, I've
been listening to some of these union representatives, it
gets pretty nitty gritty, but I think the key
takeaway is it's it's it's a sort of draconian labor
policy. Some of these rail carriers have had and
just, they haven't changed them in a while.
Um, you know, meanwhile, you know,
workers around the country that, you know, have
been dealing with, covid people, you know,
being homesick, etcetera. Um And rail workers were
saying, you know, they couldn't take time off
two if they were sick for fear of retribution by
their employer. Um And then there there's all these
like really nitty gritty um like deals on time off
, like if you had, if you just needed
a couple hours off, then somebody had to come
in for you by the person that came in for
you. They took a lot of time to get
there and then often times they'd have to stay for
much longer than just your two hours. Um So
the person that was only wanting to take tours off
, they usually got docked for maybe say 10 or
15 hours. Um And so it got, it
got pretty detailed, but um but you know,
these real workers were saying it was really interrupting their
just quality of life. On the other hand,
you nobody's holding a gun to their head to force
them to work for this industry. But a lot
of these workers have worked in the, in the
rail on the railroads for generations. Um So it's
, you know, it's it's kind of exciting how
President biden came in um, and intervened personally.
But overall, you know, these these workers did
really hold out for the deal that they wanted and
it looks like it was that everybody is coming away
satisfied. You know, what struck me is that
they are saying that this deal is tentative. So
what does that actually mean? And could negotiations go
backwards if we face another possible stoppage, Right?
So now there's a cooling off period and and all
this is just you know, this is all just
written down these are just the rules. So there
is now an official cooling off period. Both sides
review what they agreed to over that 20 hour period
uh and then they come back and sign on the
dotted line if they're happy with it. Um so
it's it's expected to to go forward though because there's
been no indications that either side is has um is
Unhappy with the agreement. And that's really important because
like I said, um and you had talked about
as well, you know, uh there's a 30%
of of us rate goes by rail, it's a
critical part of the US infrastructure especially for farmers and
bulk commodity uh producers. The um you know,
we're talking about great grain would be rotting in silos
if you know, if if rail was disrupted.
Right? And so that has a lot of ripple
effects across the U. S. Economy from everyone
from farmers to the egg industry, food producers all
the way down to household budgets. Because to the
extent there shortages, that means the prices will go
up now if this strike did happen, what impact
could have had on supply chain and prices for products
. So with a strike that means that there's a
possibility that the railroads can't get enough workers, which
means they can't carry the hazardous materials that they normally
do. So they were already taking some of that
fertilizer off the tracks. Um And as as you
all just mentioned a few moments ago, you know
, it's not clear when that fertilizer is going to
get back on the tracks. Um You know,
when will they, everybody feel comfortable enough to resume
operations as normal. You know, that's what a
lot of the egg industry is looking at right now
because they need that fertilizer. Um You know,
it's harvest season from july to november. Um You
know, farmers need that certainty that they're going to
be able to get that grain to market, get
their products to market as well as get the fertilizer
for, you know, for the next season.
So um the suitor that they can sign on the
dotted line the better because longer that there's any uncertainty
. Uh and there's disruptions to freight. Uh You
know, that means that the whole supply chain is
disrupted, right? It's very intermodal. So it
goes from freight to truck and sometimes truck to freight
. So it's just one of those links breaks down
. Then the whole system can break down which can
lead to shortages and shortages lead to higher prices.
And that just would further exacerbate this inflation problem that
the entire U. S. Economy is is experiencing
. And President biden is obviously, you know,
focused on, well, thanks to Christine Mcdaniel,
she's a senior fellow with the Mercatus Center