Railroads and Labor
Rail management and rail labor are both committed to providing America with safe, efficient and cost-effective freight transportation service.
In 2009, U.S. freight railroads had approximately 170,000 employees, including 152,000 on Class I railroads and 18,000 on non-Class I railroads.
Rail Employee Compensation
Railroad employees are among the best-paid workers in American industry. In 2009, the average U.S. railroad employee earned wages of $81,563 and fringe benefits of $25,522 — for total compensation of $107,085.
By contrast, the average wage per full-time employee in the United States in 2009 was $51,888 (64 percent of the comparable rail figure) and average total compensation was $64,552 (60 percent of the rail figure).
Collective Bargaining
Around 86 percent of Class I rail employees and more than half of non-Class I rail employees are unionized, represented by one of more than a dozen different labor unions.
Labor relations in the rail industry are subject to the Railway Labor Act (RLA). Under the RLA, labor contracts do not expire. Rather, they remain in effect until modified by the parties involved through a complex process that can take years.
Railroad Retirement
Rail industry employees are covered by the Railroad Retirement System instead of Social Security. In general, Railroad Retirement offers much more generous benefits than Social Security. In fiscal year 2009, approximately 590,000 beneficiaries receive $10.5 billion in benefits from Railroad Retirement.
Railroad Retirement has two major privately-funded components, or “tiers.” Tier I is the functional equivalent of Social Security. It is financed by a 7.65 percent payroll tax on both employees and employers. Tier II is financed by an additional payroll tax which fluctuates slightly from year to year but in 2010 was 12.1 percent for rail employers and 3.9 percent for rail employees.
In total, rail employers and employees pay retirement-related payroll taxes of 31.3 percent, compared with 15.3 percent for most U.S. businesses.
More Information:
“Railroad Collective Bargaining Process” Background Paper (PDF)
Click here for more on the Railroad Retirement System
For more information on rail labor, visit www.raillaborfacts.org.