Whiny Railroad Unions Should Have Their Industry Shaken Up
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Elon Musk’s purchase of Twitter is a story that politicians, voters, and unions should pay attention to. Politicians on the Right were upset that Twitter appeared to be censoring their tweets. Politicians on the Left were mad that Twitter appeared to not censor tweets that it should have censored. Elon Musk saw a business that was making questionable choices – and he saw an opportunity. While the public policy proposals would likely have involved government referees and more regulations, Musk's solution involves risking his own money.

Maybe some railroad union leaders taking their cues from online activists should take note.

Recently, a cadre of railroad workers decided that disparaging their industry wasn’t enough – so they called for a public takeover of the railroads. Some of the unionized are upset that there are less rail workers than decades prior. They are mad that the rail industry doesn’t need the same number of people to do the work today, and they're reacting as though their ideas are being ignored like a toddler suggesting dessert for breakfast.

If these workers, called Rail Workers United, are right, and the owners of the rail companies are making all of the wrong decisions, then maybe they should look into buying the railroads themselves. If the workers buy the railroads, and they are right, then they all stand to retire rich. The only thing standing in their way is their willingness to take a risk and the fact that they aren’t living in a fairytale.

It doesn’t stop with just calling for a public takeover of the railroads, however.  The workers are also once again threatening to strike despite winning most of the concessions they demanded; concessions supported in part by the Biden White House.

A railroad strike at a time when our economy is attempting to avoid a deep recession, would be troubling – not just for the railroads, but also for the rest of the economy.

So, they must be threatening to strike for a good reason, right? No.

Despite recent negotiations that would give the workers a 24% wage bump by 2024 with an average bonus of $11,000 immediately, and a possible $5,000 performance bonus (for an average compensation of $110,000), as well as good healthcare and an additional day off, the railroad unions are complaining that it isn’t enough. Calling for a strike while also calling for a public takeover is like the insurance fraudster that spills water in a store, slips on that water, and then blames and sues the store.

Rail labor unions have likely overplayed their hand, constantly moving the terms of the debate they themselves have set at every turn. The incentives for unions are not aligned with the workers and the railroads. The Union always wants more, and it's paid by employees to get more. But, at some point more in compensation means less overall. Less hours worked, less employees hired, and less opportunities for growth.

The owners of these companies are taking risks, and they're risks that the unions refuse to concede. Congress could ultimately intervene based on the Railway Labor Act, and the result may be that they get even less than they negotiated.

On the other hand, cleaning up the situation is easy. The unions simply need to take the “win” and move on. Or, maybe Mr. Musk will further expand his empire and start buying up railroads too.

Charles Sauer (@CharlesSauer ) is the president of the Market Institute. He has previously worked on Capitol Hill, for a governor, and for an academic think tank.

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