A railway strike would never be profitable for the U.S. economy but as the country teeters on the brink of a recession, avoiding a strike is even more dire. On Nov. 16 the American Chemistry Council (ACC) issued an economic analysis claiming that a railway strike could be the final pushing factor for America to fall into a full-on recession. The analysis also looked at the wide scope impacts a strike would inflict on the country, as reported by Freightwaves.
“[If a strike lasts one month, it] would likely put a major chill on several leading economic indicators through the first half of 2023,” ACC said.
The group represents U.S. chemical shippers and their analysis dig into the hard numbers that could become a reality in the event of a railway strike. Spanning across several industries 700,000 people could lose their jobs, $160 billion could be removed from the U.S. economy, producer price index (PPI) could rise 4%, and U.S. gross domestic product (GDP) could shrink by 1%.
The PPI keeps track of the average rate of change for domestic producers’ selling prices, according to the U.S. Bureau of Labor Statistics. A two-month long strike could see the PPI rise by 12% and the GDP shrink by 2%.
“A rail strike could shove the economy out of recovery mode and into a recession,” said Martha Moore, ACC chief economist. “A prolonged strike would have an exponential effect for each additional month and drag the country into a potential recession much faster.”
ACC, likely along with other shipping groups, would be directly impacted by a railway strike. ACC doesn’t keep more than a work-week’s worth of empty shippers or materials, according to the analysis. Not having the supplies they need to complete the shipping process could force them to shut down.
Other shippers have mirrored ACC’s discourse with Congress, urging the leaders of the U.S. Senate and House of Representatives to prevent the railways from striking. If a strike seems inevitable, Congress should pass legislation that would make relevant labor agreements signed by the unions and railroads in September, ACC said.
It should be kept in mind that whether or not a recession hits the U.S. economy, the trucking industry is well-insulated from any serious impact. Truck drivers and the professional and skilled services they provide are integral to both American culture and its economy. If America doesn’t need one thing, it’s a railway strike. If it does need another, its truck drivers.
