According to a new analysis by the Anderson Economic Group, a US freight rail strike could result in $1 billion in economic losses for the US economy within the first week.
US consumers and workers could lose a quarter of a billion dollars in the first three days. A transit strike involving rail is disruptive and costly and can cause disruptions to the economy.
Anderson Economic Group reported that a strike at the national railroad can have economic impacts on the economy, including lost wages for workers and production delays due to non-delivery in certain vulnerable industries.
These industries could include agriculture, ethanol, and retail. Retail Industry Leaders Association calls on policymakers to intervene to “avoid an economic disaster that is self-inflicted.”
The analysis showed that calculations show the first-day effect of $60 million. This includes $30.9 million for lost freight and $3.8 million for long-term disruptions to passenger rail. There is also $25 million in lost wages for railroad workers. This does not account for indirect losses or effects on other industries, income losses for managers and investors in rail companies, or any losses to other industries.
Due to food spoilage and agricultural goods lost, second and third-day strikes would result in losses of $91 billion.
The four rail unions that voted against the tentative agreement with US freight railways have set a December 9 strike date if they don’t reach a new deal.
Congress could issue a contract to the four unions or extend the cooling-off period to prevent a nationwide strike. However, rail companies and unions are far apart on the crucial sticking point of the absence of paid sick leave.
The Anderson Economic Group is an international consulting firm specializing in public policy, valuation of businesses, market analysis, and industry analysis.