Effect of Inflation on Railroad Working Conditions versus Wages

[BaltACD]

Euclid

 

tree68 

Euclid

Since you asked me how I am compensating my employees so that their wages are keeping up with inflation, let me ask you... 

In other words, he doesn't have an answer... 

The question was from Murphy to me on the previous page.  I answered it about 12 posts up, and he did not like the answer.  So then I asked him the same question back about what he or his company would do about raising the company's wages to keep up with inflation.  He never answered me back.  Actually I have no idea why he even asked me the question in the first place.  He never explained the reason for his question.  But I certainly did answer it.  

I don't know why you edited my quote to eliminate the point it was making.  The edited quote of me is meaningless and then you insert your own untrue meaning into the quote.

Word Salad, with no dressing.

[CMStPnP]

zugmann

I'm no executive, CEO, HR rep, or post hole digger, but I thought that is why we are supposed to get new contracts every 5 years.  To re-negotiate compensation to in part help keep up with inflation.  

No clue about how it works with railroads but I would have to guess you also have to keep current or retention of employees goes to crap.    Though I kind of suspect Euclid was confusing Inflation which is not hard to keep ahead of with hyper-inflation which is hard to keep in front of.   I think he accidently transposed the definitions in his post above..........or not?   

[Euclid]

This article explains the point of my original post:

 

Why this is a critical moment for American workers to push for wage gains

 

https://www.cnbc.com/2022/05/27/two-thirds-of-american-workers-say-pay-not-keeping-up-with-inflation.html#:~:text=Sixty%2Dsix%20percent%20of%20workers,has%20increased%20more%20than%20inflation.

[Murphy Siding]

Euclid

 

 

tree68

 

 

Euclid

Since you asked me how I am compensating my employees so that their wages are keeping up with inflation, let me ask you...

 

 

In other words, he doesn't have an answer...

 

 

 

 

The question was from Murphy to me on the previous page.  I answered it about 12 posts up, and he did not like the answer.  So then I asked him the same question back about what he or his company would do about raising the company's wages to keep up with inflation.  He never answered me back.  Actually I have no idea why he even asked me the question in the first place.  He never explained the reason for his question.  But I certainly did answer it. 

 

I don't know why you edited my quote to eliminate the point it was making.  The edited quote of me is meaningless and then you insert your own untrue meaning into the quote.

 

 

Blah, blah, blah. You've answered nothing, you've said nothing. Your response about 12 post back means nothing. You're just skirting questions.
     Our company has been raising wages to retain employees and to possibly hire some away from competitors who aren't keeping up with supply and demand issues.

[jeffhergert]

Euclid's link was fom May.  Now I'm seeing more articles about hoe the "Great Resignation" is becoming the "Great Regret" (or something along that line) because of many who left jobs for better pay and/or working conditoins/satisfaction and now are finding out the grass isn't any greener. 

If I understand the PEB's reasoning, they feel the current demand-inflation is an abberation and will subside back to "normal" levels. (I personally think things will fall back some, but businesses will feel people have gotten "used to" higher prices enough that they don't have to go back to previous levels, even if possible.)  Most of the time in contracts past, we felt lucky if raises kept pace with employee health contributions.

Jeff 

[Euclid]

Murphy Siding

Blah, blah, blah. You've answered nothing, you've said nothing. Your response about 12 post back means nothing. You're just skirting questions.

     Our company has been raising wages to retain employees and to possibly hire some away from competitors who aren't keeping up with supply and demand issues.

So what?  Why did you ask me what I was doing about that issue?  I am not opposed to raising wages.  You must believe I am.  What question have I skirted?

 

[Euclid]

CMStPnP

Though I kind of suspect Euclid was confusing Inflation which is not hard to keep ahead of with hyper-inflation which is hard to keep in front of.  

I am not referring to hyperinflation.  I am referring to the level of current inflation.

 

Here is one of many articles that says that wages are far from keeping up with inflation:

 

Why Salary Increases Do Not Keep Pace With Inflation

 

https://www.forbes.com/sites/johnbremen/2022/04/07/why-salary-increases-do-not-keep-pace-with-inflation/?sh=31c3b2b07533

 

 

Another article:

 

For most U.S. workers, real wages have barely budged in decades

 

https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/

[Murphy Siding]

Euclid

 

 

Murphy Siding

Blah, blah, blah. You've answered nothing, you've said nothing. Your response about 12 post back means nothing. You're just skirting questions.

     Our company has been raising wages to retain employees and to possibly hire some away from competitors who aren't keeping up with supply and demand issues.

 

 

 

So what?  Why did you ask me what I was doing about that issue?  I am not opposed to raising wages.  You must believe I am.  What question have I skirted?

 

 

I'm done playing your game. Carry on without me.

[Backshop]

tree68

 

 

Euclid

Since you asked me how I am compensating my employees so that their wages are keeping up with inflation, let me ask you...

 

 

In other words, he doesn't have an answer...

 

He did answer.  His "excavating business" didn't have any employees because it was just him and his shovel.  Just like his "network installation" or whatever it was business was just him helping a neighbor set up his wifi for money.

[dpeltier]

jeffhergert

If I understand the PEB's reasoning, they feel the current demand-inflation is an abberation and will subside back to "normal" levels.

I believe they just used inflation predictions from some federal agency that is tasked with predicting such things. Not that anybody can predict the future, but neither side appeared to have seriously disputed those independent predictions.

Most of the time in contracts past, we felt lucky if raises kept pace with employee health contributions.

I think this is where there is a serious difference of perspective between the two parties, and it is largely driven by the fact that a.) the cost of providing fringe benefits, specifically health care, keeps climbing much faster than other measures of inflation, and b.) most other private-sector workers have been losing benefits at a fast rate.

So from a worker's perspective, a raise in wages that keeps pace with inflation, coupled with an increase in how much they have to contribute to health care, seems like losing ground. From the employer's perspective, the total cost of wages and benefits is still increasing faster than inflation, and faster than the labor costs that it's competitors are paying.

These rising labor costs then have a spillover affect on other aspects of the workplace. The employer responds by focusing on labor productivity*, which sometimes means investments in labor-saving technology and sometimes means finding ways to keep workers working harder throughout the time they're getting paid for. In the case of TYE agreements, where pay is not always tied very closely to how long or how hard a person works, there's even more room to extract more labor for each dollar spent.

So now we have a situation where workers see that jobs are getting cut and feel that they're working harder for less pay, while the company still feels that they're paying more in labor costs for the same level of work. This was the trend even before "PSR", whatever that is.

Certainly for the railroad industry, things would be a lot simpler if government health care spending was not laundered through employers, but was handled directly between the government, it's citizens, and health care providers.

Dan

* At BNSF, there is a quarterly "all-hands call" where the executive team gives a presentation to and takes questions from all salaried employees via conference call and PowerPoint. I remember for a while, a few years back now, someone always included a waterfall chart in the presentation. The chart showed the growth of labor costs due to agreed-upon wages and benefit inflation, partially offset with "productivity improvement initiatives", resulting in a targeted total cost inflation - which I think was often in the neighborhood of general inflation indices like the CPI.

[Electroliner 1935]

But when the CEO makes >200 x the median employee wage, it is pay for performance. Their wages are boosted by stock buy backs. What a racket.

[BaltACD]

Electroliner 1935

But when the CEO makes >200 x the median employee wage, it is pay for performance. Their wages are boosted by stock buy backs. What a racket.

Back when I was a company official for CSX, they purchased Texas Gas Co (which included a pipeline company, SeaLand Container Shipping, a stevedoring compnay that operated at multiple ports, both foreign and domestic as well as American Container Barge Line).  CSX withheld officers 'bonus' payments that year because of the cost of that acquisition.  A few years later when they sold off those properties, the company deemed the proceeds as a one time capital gain and not a part of the profits from which the officers bonus' were calculated.  I am certain however, that the Board Room types got their bonus on both ends of the transactions.

[jeffhergert]

Most of our officer's bonuses were cut about a year or two back. Only "senior" level field managers still get them.  That is, only the top boss at a terminal.

Senior management will always get a bonus (provided they meet set goals,  usually easily met) because it's considered part of their compensation.  At least until the big stockholders realize that senior management are employees, too.

Jeff

[Euclid]

In reading some of the PEB conclusions in the section named Wages – Compensation, on page 39, I find that they do not recommend any specific linking of wage increases to inflation increases. 

 

They only compare present and projected rates of inflation with their recommended wage increase.  So, yes some of the inflation increase will be offset by some of the pay increase, but there is no commitment to keep members from losing ground to rising inflation.  They do not recommend adopting a formula that would do that. 

 

They discuss a large number of variables in attempting to adjust pay to keep ahead of inflation.  There are several economic scales that can be used to measure and quantify inflation.  They don’t always produce the same result.  I read from page 11 to page 39.  With they’re numerous 50-word sentences marching past with their many variables and conclusions hinging on various conditions, I will be amazed if this process can lead to a settled agreement. 

 

https://www.docdroid.net/t9jodav/peb-recommendation-pdf#page=39

 

Their conclusion from page 39:

 

“Our recommended GWI for 2020 is significantly higher than the rate of inflation in that year.

 

The recommended GWIs for 2021 and 2022 are slightly below, but not significantly so, particularly when the service recognition bonus amounts and the real wage growth granted in 2020 (which is continued thereafter in subsequent years of the Agreement) are considered.

 

Our recommendations for 2023 and 2024 are slightly higher than the projected amounts of inflation contained in our record, even before consideration of the bonus payments in those years or the other items in the package that have significant monetary value.

 

In sum, consideration of inflation militates in favor of our chosen recommendation in this case even though inflation has not typically been, nor should it be, applied in a mathematically precise fashion (particularly during periods of spikes) to arrive at the appropriate wage bargain.”

[charlie hebdo]

dpeltier

Certainly for the railroad industry, things would be a lot simpler if government health care spending was not laundered through employers, but was handled directly between the government, it's citizens, and health care providers.

Most people and corporations would be better off.  Or a hybrid where individual, government and businesses paid to-be-defined shares?  These ideas have been floated for years but always blocked by certain political groups.

As to inflation, use COLAs prospectively and an adjustment to prior year retrospectively.

[Euclid]

US rail unions in damage control mode as railroaders press for strike action after pro-company federal intervention

 

From the link:

 

In the same graphic, the BLET also claims as a “myth” that these wage increases “don’t even come close to keeping up with inflation.” In fact, the BLET responds, the wage increases, which are retroactive to 2020, do keep pace – with inflation in 2020! Wage increases for 2021 and 2022, the BLET admits, are “slightly below” inflation for those years.

 

https://www.wsws.org/en/articles/2022/08/27/rail-a27.html

 

Keeping wages a pace with inflation is a big issue now because inflation is much higher than normal now, and thus there is great uncertainty about what it will do in the future.  In the PEB report, the topic of compensating wages for inflation is discussed in great detail on pages 37- 39, where the PEB decides to not couple inflation with automatically compensating wage increases.  This section of pages offers what feels like an avalanche of excuses as justification of their final conclusion. 

 

The PEB hesitates to have wages compensated for inflation apparently because locking that into the contract will retain the wage increases even if inflations were to suddenly stop.  They also mention that a serious recession might follow the ending of inflation, and that this would end inflation, further conflicting with the automatic increases in pay based on rising inflation.  But this suggests that if inflation compensation is written into the contract, it cannot be withdrawn if inflation suddenly ceases.  Why can’t it be written in with a provision that allows it adjust for inflation in real time?  That way, if inflation stops, so too will the inflation wage increases stop. 

 

I wonder if the PEB has a degree of bias in judging the current inflation.  We have already seen that there can be denial of the real damage than inflation can produce.  Recently we were told that the current inflation had ended.  Earlier we were told that present inflation was not caused by factors in this country.  Initially we were told that present inflation was only transitory and just an artifact of a strong economic upturn, almost as if the inflation was a sign of economic success. 

[Convicted One]

Euclid

I wonder if the PEB has a degree of bias in judging the current inflation. 

I believe that is undoubtedly a factor.  They are hoping the wolf at the door will run out of steam, and  just go away.  I wouldn't be surprised to see if they try to incorporate similar "optimism" when announcing the COLA for Social Security beneficiaries next month. (just my cynical self)