(Source: Bloomberg, January 23, 2023)
Costs will still be a key consideration for the railroads — and their investors. Voluntary paid sick leave and more flexible schedules would add to the expense of the labor agreement, which over five years raises salaries by 24%, pays bonuses totaling $5,000 and adds one day a year of personal leave. That could come at the expense of dividends and share buybacks, which have soared in recent years. Workers remain skeptical that they’ll truly benefit from the trade off. Railroads historically have been quick to furlough staff during downturns, have required long hours with little flexibility and have imposed strict attendance policies that allow the railroads to operate with fewer workers. The strains led workers to the verge of a nationwide strike last year, requiring White House intervention to help bridge the divide.
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