The United Transportation Union announced yesterday that its members had ratified a national rail contract by a vote of 60 percent to 40 percent. The new agreement calls for a wage increase retroactive to January 2010 but requires UTU members to pay more for health care.
“The 17 percent wage increase over the life of the agreement is significantly higher than the rate of inflation,” said Mike Futhey, UTU president. Futhey also said that the health care provisions of the contract cap worker contributions to the health care premium at $200 a month until July 2016. “With health care costs continuing to rise, this cap will be even more extraordinary in each successive year of this contract,” Futhey said.
The National Carriers’ Conference Committee (NCCC), which represents the nation’s largest rail carriers in negotiations with UTU and other rail unions, was also pleased with the contract and announced shortly after the tentative agreement was reached in June that the pact was a contract pattern for other union negotiations.
But 11 unions representing other rail workers rejected NCCC’s assertion because the wage increase was inadequate given the railroads’ profitability record and because the health care concessions negotiated by UTU significantly increase health care costs for workers.
“What has unified nearly all of rail labor is the (NCCC’s) assertion that the . . . tentative agreement with the United Transportation Union (UTU) sets the pattern for an industry-wide agreement,” reads a statement by the International Brotherhood of Boilermakers on its website.
According to the Boilermakers, the wage increase negotiated by UTU is only 14 percent during the five-year term of the contract because the other 3 percent becomes effective only in the year after the contract expires, and the increase, which amounts to a little more than 2 percent a year, is short of the increase unions won in the last five-year contract.
The smaller wage increase comes at time when rail profits have grown substantially from $15.9 billion in constant 2009 dollars during the five-year cycle before the previous contract was negotiated to $32.7 billion during the five-year cycle before this contract was negotiated.
But even more objectionable are the health care concessions. According to the Brotherhood of Maintenance of Way Employees Division of the Teamsters (BMWED), UTU’s health care concessions shift more than $250 million in health care costs from “wealthy railroads to the backs of middle-class workers.”
Under the old contract, workers paid no deductibles for health care services. The UTU contract, on the other hand, requires workers to pay a deductible and a 5 percent co-insurance fee for health care expenses above the deductible up to $1,000 a year for individuals and $2,000 a year for families.
BMWED estimates that the new deductible and changes to the plan that limit workers’ medical options will cost “each employee $77.77 per month on average;” furthermore, according to BMWED, agreeing to contract language that shifts more than a quarter of billion dollars in health care costs is “a slippery slope. Once the railroads get new categories of deductibles, they will push relentlessly to increase them in each subsequent round of bargaining.”
BMWED and the Boilermakers are part of a six union bargaining coalition called the Rail Labor Bargaining Coalition (RLBC) that also includes the Brotherhood of Locomotive Engineers and Trainmen (Teamsters), Brotherhood of Railroad Signalmen, National Conference of Firemen and Oilers (SEIU) and Sheet Metal Workers International Association.
The RLBC had been in negotiations with NCCC since 2010. When the negotiations stalled, the RLBC and NCCC talks moved into a mediation phase as required by the Railway Labor Act. But when UTU and NCCC reached their tentative agreement, RLBC decided to withdraw from mediation and sent a letter to the National Mediation Board, which was overseeing the process, asking the board to release it from mediation, so that the dispute could enter the final dispute-resolution process under the Railway Labor Act.
Five other unions, the Transport Workers Union, IAM, Transport Communications Workers, American Train Dispatchers, and IBEW, are part of an informal bargaining coalition that also requested an end to mediation.
On the same day that UTU announced that its members had ratified the new agreement, the National Mediation Board announced that it was releasing the unions from mediation.
The unions also rejected the board’s offer of binding arbitration, which means that a Presidential Emergency Board could be appointed to recommend a solution to the impasse, which would settle the dispute if both sides agree. Congress could also intervene, and, if it can come to an agreement, impose a settlement. In the event that neither remedy settles the dispute, a national railway strike is possible.