Canada Rail Strike Disrupts Supply Chain
A rail strike is currently taking place in Canada. The strike has started to affect productions in industries such as mining, lumber, auto industries, and could affect the U.S. economy if it continues. The strike includes 2,800 conductors and yard workers for Canadian National Railway Co., one of the two major railways in Canada.
“A much broader economic toll will be felt if the strike continues, says Robert Hogue, a senior economist at BMO Capital Markets, the investment- and corporate-banking arm of the Bank of Montreal.” According to Mr. Hogue “producers facing shortages of supplies may also be facing cost increases as well as a higher risk of losing sales opportunities.”
The strike hasn’t crossed the border into the U.S. where Canadian National rail lines operate , but freight shipments that the railroad hauls between the U.S. and Canada have begun to be affected. In the U.S. we have the Railway Labor Act of 1926 which mandates collective bargaining in railroads and airlines. The Canadian Labor Minister Jean-Pierre Blackburn said “legislation to end the strike would be offered if no agreement was reached.”
The workers are seeking better pay and better working conditions. The last contract the employees were under expired towards the end of December. According to Machalaba, “The strike in Canada represents what some analysts believe is an almost inevitable conflict between an increasingly aggressive rail union and a tough, efficiency-minded railroad.”
Union workers are trying to improve two of the most sought after benefits in a new contract, higher wages and better working conditions. Right now the strike is in its beginning stages where employer concessions are low and union resistance is high. Eventually, after a specific amount of time, concessions will rise and resistance will fall causing the new wage to be offered somewhere in the middle. If there was perfect information between unions and firms and union leadership and membership, would there be strikes? Would the union and firm come to an agreement almost immediately?
1 comment:
Even with perfect information, there would still be some resistance between unions and firms, although a little negotiation would be more effective than a strike in that case. I believe the perfect information would allow the two sides to come to the consensus pay level based on the model we learned about in class pertaining to the wage demanded by unions and the level of resistance over time - rather than have a lengthy curve that arcs, it likely would be a very inelastic curve that might bob up or down a slight bit over time, as the fight would be over small incremental wages rather than large changes in the pay level.
Post a Comment