September 19, 2022 — Modern Economy Project
First, the good news. Extensive negotiations this week averted the threat of a major railway worker strike. The 11th hour negotiation between rail worker unions, railway companies—and even the White House— yielded a compromise that hopefully can hold through final consideration by individual groups. Both sides agreed to changes in pay, time off and more flexibility to keep operations running.
But what does it say that we came to such an extreme moment?
We know that stakes for a weak U.S. economy could have been disastrous. The Association of American Railroads estimated a shutdown could have cost the economy more than $2 billion a day and “idle more than 7,000 trains daily and trigger retail product shortages, widespread manufacturing shutdowns, job losses and disruptions to hundreds of thousands of passenger rail customers.” Not to mention, nearly all corn and ethanol shipments in the U.S. are completed by rail.
A truly modern economy must be a resilient economy. This week it was a labor dispute that brought us to the verge of economic – and societal – catastrophe. There are other labor-focused risks to the supply chain, including West Coast dockworkers and ocean-based carriers. We hope all parties can work to resolution, and Congress and the Administration should stay active in keeping dialogue ongoing and productive.
Such possible crises are not the only change. We just weathered, and continue to face, a multi-year pandemic. Next month or next year could be an energy, cybersecurity or other unforeseen threat.
The only way to confront these challenges is together. And we should all resist the urge to suggest binary options – the “my way or the highway” approach weakens the entire infrastructure of our economy. Instead we should look across our economy for places where companies have advanced benefits and opportunities for their workers without a staring contest that puts our economy at risk.
Which brings us to another conclusion, and that is this era of extreme brinkmanship can have terrible consequences. Entrenchment, be it political, economic or societal will only cause more of these intense moments.
As former Senator Claire McCaskill mentioned in a virtual discussion with us earlier this year, there are a whole lot of people "stuck in that [old] binary world." Finding common ground will lessen the threats to our economy and we should champion the millions of workers and employers who find a way to do that everyday.