Freight-rail workers are getting more sick benefits, no thanks to grandstanding politicians.
Freight-rail workers are getting more sick benefits, no thanks to grandstanding politicians.
F or a week or two, it became conventional wisdom in American political discourse that U.S. freight railroads were evil, greedy corporations that hated their workers and would never give them even a single day of sick leave without Congress forcing them to do so. Senator Bernie Sanders (I., Vt.) proclaimed repeatedly (and falsely) that rail workers currently get “zero” sick days, and even some Republicans, such as Senator Marco Rubio (Fla.), joined in professing concern for the workers’ plight.
The Democratic-controlled House passed an amendment to the labor agreement to add seven sick days to the national contract, but the Senate rejected it, instead adopting the contract that the railroads and labor leadership had negotiated under the watch of Secretary of Labor Marty Walsh. After its adoption, Sanders said, “This struggle is not over. At a time of record-breaking profits for the rail industry, it is disgraceful that railroad workers do not have a single day of paid sick leave.” Rubio said, “The hardworking rail worker was left out in the cold.” And then the issue vanished from the headlines.
Now, freight-rail workers are getting more sick leave. Bloomberg reported yesterday:
Railroads including Union Pacific Corp., Norfolk Southern Corp. and CSX Corp. are weighing offering paid sick days — or are already doing so — along with schedule changes and other steps to improve employees’ work-life balance. The sweeping efforts, coming alongside a revised union contract that raised pay, aim to improve worker relations in an industry that has struggled to hire and retain employees.
“We don’t consider our front-line workers as simply costs to the company’s bottom line,” Joe Hinrichs, chief executive officer of CSX, said via email. “Instead, they are the primary driver of our profitability.”
The ball started rolling on these moves soon after the national contract was adopted by Congress in December. It was driven by investors and by railroad leadership.
On December 5, the Interfaith Center on Corporate Responsibility, an activist investor group, filed shareholders’ resolutions with Norfolk Southern and Union Pacific urging the companies to add more sick leave. Impact Shares and Trillium Asset Management, two other activist investor groups, did the same. These groups don’t own significant stakes in the railroads, but they were nonetheless exercising their right as shareholders to express their thoughts on the companies’ management.
What likely mattered more was the realization by management that railroad performance would be hurt by low worker morale. Union Pacific CEO Lance Fritz went before the Surface Transportation Board on December 14 to testify on a separate issue, but the issue of sick leave came up nonetheless:
“We definitely want to address sick leave and certainty in time off in terms of scheduling . . . There’s a host of ways we can get there,” Fritz replied. “There’s economics that are available to make that happen. And we are committed to making that happen this coming year.”
CSX came to a similar conclusion. On December 13, it announced it was changing its attendance policies:
CSX is among the railroads that used so-called points-based attendance policies to reduce unplanned absences. Under the long-established policies, workers are penalized with points for unscheduled absences, and risk being suspended or fired. . . .
Under the new policy effective Jan. 1, CSX said on Tuesday it will no longer assess points when an employee calls in sick shortly before a scheduled workday with an illness for which they saw a doctor.
CSX’s new attendance rules will be “non-disciplinary and non-punitive,” the company said in an email to Reuters.
You might think the politicians who made such a big to-do about sick leave for rail workers would be celebrating these changes. But Bernie Sanders is pressing on with legislation to require railroads to add sick leave at the national level. And Rubio’s office has not issued a statement about rail workers since December 5.
As National Review pointed out in its editorial, and as I pointed out multiple times in my coverage of the dispute, railroads and workers were always free to negotiate sick leave at the local level. That’s how it has been negotiated in the past, and it’s where the independent recommendations from the presidential emergency board said it should stay. The contract that Congress ended up adopting was based on those independent recommendations, and we are now seeing those negotiations play out at the local level, company by company.
Politicians weren’t really interested in securing more sick benefits for rail workers. They were interested in taking credit for securing more sick benefits for rail workers. Now that there’s no credit to be had, the politicians are nowhere to be found, even though rail workers are getting more sick benefits. And as for the supposed insufficiency of the market, the railroads are now proving that ordinary means of sound management and shareholder pressure are enough to improve benefits without a one-size-fits-all government mandate.