The effort to avoid a potentially costly and economically damaging rail strike is apparently collapsing, as the Biden administration’s proposed deals with unions has apparently derailed. This may result in increasingly higher prices for energy, just in time for winter and the Christmas holiday.
As the “most union president” in history, Biden has staked his reputation on the ability to support and carry unions and their members. But apparently, despite his self-proclaimed support, union workers weren’t impressed with Biden’s deal and now the country is heading full steam towards a rail union strike.
In September, after nearly three years of negotiations, the Biden administration celebrated after they secured a deal with 12 unions representing railroad workers. While the leadership agreed, the rank-and-file did not and four of the unions rejected it. This means that a strike could begin around Dec. 9.
This could result in higher energy prices, as coal and ethanol are the most common commodities transported via trains. Given that 10% of every gallon of gasoline is made up of ethanol, Americans could be looking at more pain the pump. At their current stockpile levels, a decrease in ethanol transportation could start impact the market in as little as 10 days.
“However, as those delays progress and get extended … we find that the terminals will run out of ethanol and consequently will not be able to supply their customer demand for gasoline to be sold at the retail service station,” said Andy Lipow, president of Lip Oil Associates.
The president has now asked Congress to override the union workers objections and ratify the tentative deal.
The government has support from industries that rely on railroads to get supplies and materials from point a to point b.
“A rail strike could create a debilitating logistics chokepoint for the movement of energy and materials resources essential to our grid reliability and energy affordability, as well as our manufacturing sector and the energy security of our allies in Europe,” National Mining Association President and CEO Rich Nolan said last week.
Apparently, it’s estimated that a rail strike could cost the country $2 billion per day.
But at the heart of all of this is the continued and growing power of unions. Given Biden’s express support for unions and their leadership, he has given them a greater level of power despite union membership being on the decline.
Being a member of a union has been romanticized and is now seeing a bit of a resurgence in Amazon and Starbucks, companies that have thrived and grown because of capitalism and free markets. Unionization stifles growth and productivity.
Ironically, the very party that champions unions and the “most union president” in history are the ones doing all they can to obstruct the decision of unions. Perhaps that’s a sign that unions are not the best idea.
