US freight rail strike could cost economy $1 billion in first week
(CNN) — A US freight rail strike could cost the US economy $1 billion in the first week of the strike, according to a new analysis from the Anderson Economic Group.
In the first three days alone, US workers and consumers could see potential losses of a quarter billion dollars as a transit strike involving rail is one of the most expensive and disruptive events that can happen to the economy.
“Economic impacts caused by a national railroad strike include lost wages for the industry’s workers and production slowdowns due to non-delivery of critical components in some vulnerable industries,” the report from Anderson Economic Group said.
Those industries could include ethanol, retail, and agriculture. The Retail Industry Leaders Association is calling on policy makers to intervene to “avoid a self-inflicted economic disaster.”
“Calculations show a first-day impact of approximately $60 million, including $30.9 million for lost freight, $3.8 million for long-term passenger rail disruption and $25 million in lost railroad industry wages,” the analysis revealed. It does not include indirect effects or losses on other industries or income losses for rail company investors and managers.
Second and third day strike losses would increase to $91 billion per day because of lost agricultural goods and food spoilage.
The four rail unions who voted down the tentative agreement with US freight railroads have set a joint strike date of December 9 if they do not reach a deal on a new contract.
Congress could impose a contract on the four unions or extend the cooling off period to avert a nationwide strike, but rail companies and the unions have been far apart on the key sticking point — the absence of paid sick time.
The Anderson Economic Group is a consulting group specializing in public policy, business valuation, and market and industry analysis.
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