White House turns to dawn to avoid railroad strike amid rising inflation

It took more than 20 hours of negotiation and a turbulent dawn until an announcement by the White House in the early hours of this Thursday morning (15) reassured political class and business in Washington: companies and unions representing railroad workers reached an agreement and suspended the strike scheduled for Friday (16), which promised to impact all sectors of daily life in the United States.

According to the Association of American Railroads, which represents companies in the rail sector, the forecast was that the stoppage would cause losses of US$ 2 billion (R$ 10.3 billion) per day, and that up to 570 thousand jobs would be lost. lost in two weeks in industries dependent on rail supply, says the association.

At least 13 unions representing around 150,000 workers were involved in the negotiations, which generally called for a raise in wages and better working conditions, and more specifically for an end to payroll deductions for hours not worked for medical appointments and family emergencies. , among other points. This would be the first strike in the rail system since 1992.

The fear was the impact on the already battered US economy, with two consecutive semesters of decline in gross domestic product, amid annual inflation of 8.3%, according to data released on Tuesday. The shock would be even greater in the price of food, which accumulated a high of 11.4% in the last year.

The most immediate concern was with agriculture. According to the CBA (Consumer Brands Association), an association that represents manufacturers of food, beverages and household products in general, since Wednesday there were already delays in the transport of fertilizers and agricultural products, with the decrease in services.

The expectation was that already on this farm the transport of agricultural products would be interrupted. The White House tried to negotiate other ways to distribute this food, but according to the CBA, it would take 467,000 trucks a day to meet demand.

“If the tracks don’t work, our entire farming system will stop working,” Republican Senator Deb Fischer said Tuesday. “Russia’s horrific invasion of Ukraine has drastically reduced the flow of grain, and the war has further damaged the fertilizer supply chain. All this to say that interest in the rail negotiations could not be greater.”

Prices for ethanol, which has 70% of its transportation on rail, soared this week amid the threat of shutdown.

There were also impacts on the passenger transport system, which transports more than 12 million people a year. Amtrak, the state-owned rail transport company, announced the cancellation of long-distance travel on Thursday.

The strike was predicted to affect different aspects of American life: the Association of American Railroads says the rails carry 75% of new vehicles made, chemicals used in water treatment, tens of thousands of online shopping packages, among others.

According to the association, the rail system carries a third of US grain exports, and a train loaded with wheat has enough supplies to make 260,000 loaves of bread. Among other materials, the organization claims that a plastic-fueled vehicle carries material to make 2 million 2-liter soda bottles and a shipment of fertilizer supplies a 4,500-acre farm. In addition, a train with 100 containers carries 200,000 online shopping packages delivered by UPS, a major American carrier and the largest customer of the rail system.

All of that impact would come less than two months before the midterm legislative elections, which threaten the Democratic Party’s control of Congress, and have put all the White House’s efforts into negotiations to avoid stalling.

According to the American newspaper The New York Times, President Joe Biden even called union leaders and businessmen on Monday. This Wednesday, the two sides turned the night into negotiations at the Department of Labor, in Washington, with the secretary of the portfolio, Martin J. Walsh, who canceled a last-minute trip to Europe. “Everyone is going to have to give in a little,” Transport Secretary Pete Buttigieg told reporters earlier.

There was strong pressure from business sectors for Congress to intervene if the Biden administration failed to avert a strike. “If they don’t reach a conclusion, I will use my prerogatives as a member of the Senate to intervene in Congress and work to avoid the impacts of a nationwide shutdown,” Republican Jerry Moran said in a speech to the Senate.

It was what the White House wanted to avoid. Biden is seen as close to the union sectors and did not want to deal with the setback so close to the November legislative elections. A spokeswoman for his government, Karine Jean-Pierre, said on Wednesday that “this is an issue that can and must be resolved by companies and unions, not by Congress.”

In the early morning of this Thursday, however, the outcome came. In a statement, the president hailed the outcome of the negotiations as a victory for workers “who have worked tirelessly throughout the pandemic” and said the agreement “will keep Americans employed in all industries across the country” that depend on the rail system.