A potential Rail strike is a result of inflation and paying people not to work

Michael Busler
3 min readSep 12, 2022

Workers see high inflation and a labor shortage. They want large raises and better working conditions. Here comes the wage-price spiral.

There is the potential of a strike by freight rail workers as early as Friday, September 16. This action would be devasting to the economy, mostly by creating shortages that will cause prices to skyrocket. Actions like this should be expected, though, when inflation is near 9% and the government keeps paying people to not work.

The hope is that a strike can be avoided by having the rail companies and the workers reach an agreement. The Biden Administration appointed the Presidential Emergency Board (PEB) which released recommendations for a settlement. They offered a whopping 24% wage increase over a five-year period.

A number of unions have accepted this very generous offer. But several unions have not. They say in addition to the large wage increases they want more. They want a reduction in hours worked and more paid time off. From the rail companies' view, the 24% increase in labor cost is already too heavy of a burden. Reducing hours worked would add to the increased labor cost.

If a strike does occur, the Biden Administration can declare a National Emergency which would force labor back to work. Politically that is a very divisive tool and one that President Biden would like to avoid.

The reason that labor is taking this position is that they fear continued high inflation and they feel empowered when negotiating mostly because of the current labor shortage. In other words, it is essentially Biden Administration policies that have led us to this crucial point.

The Biden Administration and the Federal Reserve caused most of the inflation and created the labor shortage. Today’s inflation is a result of Bidens’ war on fossil fuels which reduced domestic production and drove energy prices up. It is also due to excess demand caused by the federal government spending nearly $7 trillion more than they brought in from tax revenue in fiscal years 2020, 2021 and 2022.

Additionally, the federal government continues to pay people not to work. That creates a labor shortage and drives up wages. There are currently…

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Michael Busler

Dr. Busler is an economist and a public policy analyst. He is a Professor of Finance at Stockton University. His op-ed columns appear in Townhall, Newsmax.