President Joe Biden has returned to the good graces of labor unions by announcing a $36 billion pension fund bailout that will prevent more than 350,000 truck drivers, warehouse workers, construction staff, and retirees from forfeiting their benefits.
But Biden’s intervention comes after he rankled the key Democratic constituency by urging Congress to enforce a tentative union dispute agreement between railroad companies and their employees in order to avoid a strike that would have crippled the economy before the holidays.
Biden burnished his union credentials during a White House event on Thursday, where he was flanked by Labor Secretary Marty Walsh, International Brotherhood of Teamsters President Sean O’Brien, and new AFL-CIO President Liz Shuler.
“I campaigned to restore the backbone of this country, the middle class and unions, and over the last two years, that’s what we’ve been doing,” Biden said in the South Court Auditorium. “Americans are working, the economy is growing, and incomes are rising faster than inflation.”
But a week earlier, both O’Brien and Shuler had unloaded on Biden for his call on Congress to exercise its constitutional power through the Railway Labor Act and avert a strike over the deal, which included a 24% pay raise over five years and an extra personal day, though it did not meet their paid sick leave demands. Only eight of the 12 relevant unions had ratified the framework before the Friday negotiation deadline.
“Rail carriers make record profits,” O’Brien tweeted after the Senate passed Biden’s measure, sending it to the president for his signature. “Rail workers get zero paid sick days. Is this OK? Paid sick leave is a basic human right. This system is failing.”
Shuler, who succeeded the late Richard Trumka as AFL-CIO chief last year, added it was “deeply disappointing that 43 senators sided with multibillion-dollar rail corporations to block desperately needed paid sick days.” She also promised that her union would “continue to mobilize and push forcefully until every rail worker, and all America’s workers, has the paid sick leave they need and deserve.”
Biden’s links to unions have been scrutinized since the start of his administration when American Federation of Teachers President Randi Weingarten headlined one of first lady Jill Biden‘s first events at the White House amid widespread parental frustrations with pandemic-era education. Biden is, herself, a community college English and writing professor.
But union organizing might behind Joe Biden’s potential reelection campaign would be a boon for a president who amplified his “Scranton Joe” moniker in 2020, a reference to his Pennsylvania working-class roots. Biden, who is now based in Delaware, has retained “the middle class built the country and unions built the middle class” as a refrain in his stump speech.
At the same time, George Mason University politics professor Jeremy Mayer contends unions, particularly private sector groups, are weaker now than they were more than a century ago because of dwindling membership, exacerbated by so-called “right to work” laws and political polarization. Mayer, however, did concede the unionization of Amazon and Starbucks workplaces bucked that trend.
“Fifty years ago, many unions would donate to both parties, while always leaning Democratic,” he told the Washington Examiner. “Today, almost no private sector union makes significant donations to Republicans, and the public employee unions rarely do as well, except for police, firefighters, and border enforcement. This means that the unions are taken for granted by Democrats and demonized by Republicans.”
Biden has defended his decision to support the rail arrangement, which his administration was instrumental in drafting, as “the right thing to do,” considering estimates that a strike would have cost the economy roughly $2 billion a day, in addition to contributing to inflation. October’s annual inflation rate was 7.7%, with November data expected to be published Friday.
“Our nation’s rail system is literally the backbone of our supply chain, as you all well know, and so much of what we rely on is delivered by rail, from clean water to food and gas and every other good. A rail shutdown would have devastated our economy,” Biden said in the Roosevelt Room.
“I know this bill doesn’t have paid sick leave that these rail workers and frankly every worker in America deserves, but that fight isn’t over,” the president said.
Simultaneously, Elisabeth Messenger, the CEO of union watchdog group Americans for Fair Treatment, has criticized Biden for setting a dangerous precedent by propping up the Central States Pension Fund, which had been the country’s largest financially distressed multiemployer pension plan. Messenger insists Biden’s move incentivizes mismanagement at taxpayers’ expense.
“Unions across the country are gambling with their members’ and employees’ lives, specifically their retirement security, through reckless negotiating tactics,” Messenger said in a statement. “Pensions are a promise, and unions have a duty to be focused on protecting the pensions of their members at all costs — not throwing them away as a last-ditch bargaining effort and then expecting Uncle Sam to bail them out.”
Biden announced in Ohio last July that he would use American Rescue Plan funding to shore up more than 200 Pension Benefit Guaranty Corporation-insured multiemployer pension plans poised to become insolvent by 2026, which could have disadvantaged between 2 million and 3 million union workers, retirees, and their families. The federal agency insured-plans are now anticipated to remain solvent through 2051.