Railroad Bosses Gave Millions to Congress to Defeat Their Workers

The booming railroad industry has delivered multimillion dollar payouts to CEOs and shareholders in recent years. The industry has also shoveled millions of dollars into campaign contributions — no wonder Congress knocked down pro–rail worker legislation.

A Union Pacific locomotive at a rail yard in City of Industry, California, December 1, 2022. (Bing Guan / Bloomberg via Getty Images)

The US Senate voted Thursday to deny 125,000 rail workers a handful of paid sick days that would have cost the equivalent of just four days of recent profits made by senators’ railroad industry donors, according to financial records reviewed by the Lever.

The cost of paid sick days for this year — roughly $321 million — would be less than half the amount that a single railroad tycoon, Warren Buffett, funneled to his family foundations last week.

Buffett’s railroad firm BNSF scored a huge win when forty-three senators blocked paid sick leave for exhausted railroad workers, and passed legislation preventing workers from striking. The Senate vote followed the Biden White House effectively pouring cold water on efforts to tie paid sick leave to the bill shutting down the rail strike, declaring in a press briefing that the president “does not support any bill or amendment that will delay a bill that’s getting to his desk by Saturday.”

Rail workers were asking for the same amount of paid sick days that Biden in 2020 promised he would grant to all workers in America if he was elected president. Biden has not committed to signing an executive order requiring railroads and other government contractors to provide paid sick days.

$7 Billion of Profit in Ninety Days

While opposing a plan that would have required them to spend $321 million to give workers seven paid sick days, the main railroad companies raked in more than $7 billion in profits and paid out over $1.8 billion in dividends, in a year where they and their lobbying groups have spent more than $13 million lobbying Congress — after railroad CEOs pocketed more than $200 million in compensation.

The railroad industry delivered more than $3.3 million in campaign contributions to Congress in the 2021–2022 cycle, according to data collected by OpenSecrets.

The railroad workers — constrained by an outdated labor law, the Railway Labor Act, which severely limits their right to strike — have been outgunned this time by powerful corporate titans bearing little difference from the railroads’ robber baron founders.

In August, a federal report prepared by the Biden administration stated that the railroads contend that their enormous profits do not reflect “any contributions by labor.” The railroads, meanwhile, have waged a full-court press to have Congress implement an agreement negotiated by the Biden administration that only includes one day of paid sick leave, after refusing to agree to any paid sick days in three years of talks with unions.

Buffett’s BNSF, a wholly-owned subsidiary of his nearly $700 billion conglomerate Berkshire Hathaway, raked in $1.4 billion in the last quarter. For the nine months ending on September 30, the company’s profits exploded to $4.5 billion — a $172 million increase from the prior year’s haul. Buffett himself is worth an estimated $110 billion, according to Bloomberg. The press regularly fawns over the so-called “Oracle of Omaha” for his supposed frugality, even though he travels in a $6.7 million private jet.

Another major rail operation, the Atlanta-based Norfolk Southern, reported $958 million in profits in the quarter ending September 30. On October 25, the company announced it was spending $290 million on shareholder dividends, boasting, “The company has paid a dividend on its common stock for 161 consecutive quarters since its formation in 1982.” Norfolk Southern’s dividend payouts have increased 15 percent year-over-year. Norfolk Southern’s CEO, James Squires, made more than $14 million in 2021 — 140 times the median salary of a Norfolk Southern worker.

Union Pacific, based in Omaha, Nebraska, brought in $1.9 billion in profits in the quarter, up $200 million from the same period a year ago. The carrier announced $882 million in dividends in July. Union Pacific CEO Lance Fritz took home $14.5 million in income in 2021, which was 162 times the median Union Pacific worker’s pay. Union Pacific increased its dividend payouts by 10 percent this year.

Jacksonville, Florida-headquartered CSX generated $1.1 billion in profits in the quarter ending on September 30, up $143 million from the same period the year before. On December 15, the company will pay out $213 million in dividends. CSX CEO James Foote brought home nearly $17 million in 2021. CSX increased its dividend 7.5 percent this year.

Canadian Pacific brought in $664 million in profits in the quarter — double the haul from the same period last year. On October 26, the Calgary, Alberta carrier announced that it was handing out $177 million in dividends to its shareholders. Canada Pacific CEO Keith Creel got a 58 percent wage increase in 2021, bringing his total compensation package to nearly $19 million.

Finally, Montreal-based Canadian National brought in more than $1 billion in profits in the quarter, a 44 percent increase over the same period last year. On October 25, the railroad announced a $373 million dividend to shareholders. Former CEO Jean-Jacques Ruest brought in a comparatively modest $9.2 million in 2021. Railroad workers will return to the bargaining table again in 2025. Railway union sources told the Intercept Thursday that their next step would be to push for sick leave in an anticipated Biden executive order mandating a week of paid sick days for federal contract workers.