The Odds of a US Railroad Strike
The potential for a US railroad labor strike continues to bubble up.
Moving 40% of all freight around the US, railroads remain just as important today as they did back during their real hey day of the early 1900’s.
Which is why the potential for a railroad labor strike continues to bubble up in the news. A shutdown in rail freight would leave cars and engines stranded on track, costing the US an estimated $2 billion per day of shutdown.
8 of the 12 railroad unions have voted yes on the most recent compensation package, 4 no. The package included:
- 25% raise
- $11,000 immediate backpay
- $1000 per year bonus
Now I don’t think the strike will stand for a long period of time if it does happen, if any one union strikes all the unions will honor the picket line.
However, with a majority of unions approving, Congress can force the deal to go through and outlaw a strike.
Congress doesn’t want to do this because Democrats hold the house and are very Union friendly but ultimately the Democrats negotiated this deal—which is not a bad deal—for the union—President Biden stepped in directly to help negotiate it in the months before the vote.
So it stands to reason that they’ll force them to accept it should a strike happen.
On the market side, if you’re curious, railroads are some of the best performing stocks over the past decade with the majors up on average about 425%.
Don't let the economy surprise you.
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