Concerns Over US Railroad Strike Prompt Congressional Intervention... Pelosi: "Will Pass Legislation to Prevent Strike"

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] As some unions rejected even the mediated agreement proposal in the US railroad union negotiations, increasing the possibility of a strike again, Congress has announced its intervention.

On the 29th (local time), Nancy Pelosi, Speaker of the US House of Representatives, announced at a press conference that a bill to prevent a nationwide railroad strike would be adopted on the 30th. Speaker Pelosi said, "Strikes must be avoided," adding, "Jobs will disappear, water will not be safe, and goods will not reach the market."

The US Congress has constitutional authority to regulate interstate commerce and can enforce an agreement between labor and management in the event of a railroad strike. Accordingly, Speaker Pelosi confirmed that the House aims to swiftly pass a bill accepting the tentative agreement reached through the Biden administration's intervention, including additional worker benefits added in subsequent negotiations.

This follows President Joe Biden's statement the previous day urging congressional intervention to prevent a railroad strike. In his statement, President Biden emphasized, "A halt in railroad operations would devastate our economy," and urged, "Pass the bill accepting the tentative agreement between labor and management immediately."

If a railroad strike materializes, it is feared that supply chain disruptions will worsen and inflation in the US, at its highest level in 40 years, will be further fueled. Since railroads handle nearly 30% of freight transportation in the US, a halt in operations would inevitably cause a supply chain crisis. It is estimated that a strike would cause daily damages exceeding $2 billion (approximately 2.8 trillion KRW) to the US economy. Considering that the average daily production scale in the US last year was $63 billion, this exceeds 3%.

Earlier, the Biden administration prepared a tentative agreement in September to prevent a railroad strike, including a 24% wage increase over five years until 2024, and each union was to decide on ratification by vote. However, some unions rejected the tentative agreement, leading to ongoing renegotiations. If they fail to reach an agreement, the US railroad system is likely to come to a halt due to a strike starting December 9. This would be the first railroad strike since 1991.

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