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In the first nine months of 2022, the nation’s seven major railroad companies earned $21 billion in profits and spent $25 billion on stock buybacks and dividends.
One railroad CEO received $20 million in total compensation in 2021.
The vast majority of the seven major railroads’ employees don’t have paid sick days.
Sen. Bernie Sanders, I-Vt., claimed that the railroad industry is awash in wealth even as its employees have no paid sick days.
"Everybody knows, billionaires are getting richer, working people are struggling, corporate profits are at an all-time high and they’re raising prices to make goods unaffordable for ordinary Americans," Sanders said on MSNBC on Nov. 29, three days before President Joe Biden signed legislation that blocked a railroad strike. "That’s the overall reality, and what you’re seeing in the rail industry is that whole phenomena in spades."
Then, Sanders made some claims we want to check.
In the first three quarters of 2022, he said, "the railroad industry made $21 billion in profits, provided $25 billion in stock buybacks and dividends." Sanders also said CEOs are paid up to $20 million a year, while railroad workers have "zero guaranteed sick leave."
A Sanders spokesperson said he was referring to the seven major railroad companies.
The figures are accurate for those companies, and it’s true that the vast majority of those companies’ employees have no paid sick days, though some do.
Railway carriers and 12 unions had been negotiating over employee wages, benefits, workloads and duty schedules since November 2019. Biden moved to resolve the dispute in July 2022, one day before workers could have gone on strike, by ordering the formation of a presidential Emergency Board.
Based on the board’s recommendations, Biden and Congress in late November approved a law forcing an agreement between the carriers and the unions to avert a strike that could have begun Dec. 9 and threatened the U.S. economy before the holidays.
Congress has the authority to intervene in disputes between railway carriers and employee unions based on both its constitutional power to regulate commerce and the Railway Labor Act of 1926. It’s done so nearly 20 times, according to the U.S. Chamber of Commerce.
The law that prevented a strike included a 24% pay increase for workers over five years, from 2020 to 2024; five annual $1,000 bonuses; more schedule flexibility; and a paid personal day. The Senate rejected a House-approved amendment to give workers seven sick paid days.
The carriers said average rail worker wages will reach about $110,000 per year by 2024.
The seven major U.S. railway companies reported profits totaling $21 billion for 2022’s first nine months, reports from the companies show.
Sanders is also correct that the companies reported spending $25 billion on stock repurchases and distributing dividends during the same nine-month period.
James Foote, the chief executive officer of Jacksonville, Florida-based CSX Corp., received $20 million in total compensation in 2021, including $9.15 million in stock awards.
Jessica Kahanek, a spokesperson for the Association of American Railroads, said the association does not comment on rail companies’ financial results. She did not dispute the detailed figures that PolitiFact provided her.
Nick Little, railway education director at the Center for Railway Research and Education at Michigan State University, said Sanders’ reference to the "railroad industry" was broad.
"You cannot describe the industry as all the same," Little said, because it includes 600 short lines and regional railroads, too. But "the large companies look after their shareholders rather than employee and customer stakeholders."
As of March 2022, 86% of all full-time private sector workers in the U.S. had access to paid sick leave benefits, the latest figures from the federal Bureau of Labor Statistics show.
By comparison, the vast majority of the workers of the seven major rail carriers do not have paid sick leave, said railroad analyst Tony Hatch and union lawyer Richard Edelman.
That means that if the employees want to take a day off work for sickness or a routine medical appointment, they have to use other benefits such as vacation or go unpaid, Hatch and Edelman said.
The unions argued that management’s "attendance control policies" and other rules limit workers’ ability to take off work because of illness.
The carriers opposed the unions’ request for 15 annual paid sick days mainly because, they said, it would cost $688 million per year, the equivalent of a 6.4% general wage increase.
The Association of American Railroads pointed PolitiFact to its time-off policies summary. It says members of two unions have access to paid sick leave, while all workers have long-term illness benefits that are paid.
But long-term paid sick leave can’t be used unless workers are sick for a minimum number of days and after a waiting period, Edelman said.
Hatch and Edelman said it’s also possible that some smaller rail lines offer paid sick days, but many of their employees are not unionized and their benefits are not made public.
Sanders said that in the first three quarters of 2022, "the railroad industry made $21 billion in profits, provided $25 billion in stock buybacks and dividends," and that CEOs are paid up to $20 million a year, while railroad workers have "zero guaranteed sick leave."
The dollar figures he cited are correct for the seven major rail carriers in the U.S.
Sanders is mostly correct on paid sick days. The vast majority of workers at the largest railroads have none, but a small percentage do.
The statement is accurate but needs clarification or additional information.
We rate Sanders’ statement Mostly True.
RELATED: Fact-checks about labor
RELATED: Bernie Sanders’ PolitiFact file
Twitter, Bernie Sanders tweet, Nov. 29, 2022
YouTube, MSNBC "Bernie Sanders: Congress Must Act To Guarantee Paid Sick Leave For Rail Workers" post, (2:30) Nov. 29, 2022
Email, Sen. Bernie Sanders spokesperson Mike Casca, Dec. 5, 2022
Axios, "Biden signs rail agreement into law, thwarting strike," Dec. 2, 2020
Associated Press, "Explainer: What to know on Congress’ bid to bar rail strike," Nov. 29, 2022
Congress.gov, "H.J.Res.100 - To provide for a resolution with respect to the unresolved disputes between certain railroads represented by the National Carriers' Conference Committee of the National Railway Labor Conference and certain of their employees," accessed Dec. 2, 2022
U.S. Bureau of Labor Statistics, "Selected paid leave benefits: Access," Sept. 22, 2022
CNN, "Railroad workers aren’t the only Americans without paid sick days," Dec. 1, 2022
Email, Association of American Railroads spokesperson Jessica Kahanek, Dec. 5, 2022
Email, National Railway Labor Conference general counsel Michael Maratto, Dec. 6, 2022
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Association of American Railroads, "Freight Rail Collective Bargaining Updates," December 2022
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Email, Jeff Davis, senior fellow, Eno Center for Transportation, Dec. 6, 2022
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Canadian National Railway Co., "CN’s Third Quarter Results Reflect Strong Top-Line Growth and Renewed Focus on Scheduled Operation," Oct. 25, 2022
Canadian National Railway Co., "Management Information Circular," May 22, 2022 (CEO pay)
Union Pacific Corp., "Union Pacific Reports Third Quarter 2022 Results," Oct. 20, 2022
CSX Corp., "CSX Corp. Announces Third Quarter Financial Results," Oct. 20, 2022
CSX Corp., "2022 Proxy Statement," March 22, 2022
Kansas City Southern, "Consolidated Financial Report Third Quarter 2022," accessed Dec. 5, 2022
Norfolk Southern Corp., "2022 Quarterly Financial Data Q3," accessed Dec. 5, 2022
BNSF Railway Co., "BNSF's Third Quarter 2022 Financial Performance: Volumes, Revenues and Expenses," accessed Dec. 5, 2022
Canadian Pacific Railway Limited, "CP reports solid third-quarter results; well-positioned for strong finish to 2022," Oct. 26, 2022
Email, Nick Little, director of railway education, Center for Railway Research & Education, Michigan State University, Dec. 5, 2022
Interview, railroad industry analyst Tony Hatch, Dec. 7, 2022
Interview, union lawyer Richard Edelman, Dec. 7, 2022
Email, Railroad Workers United general secretary Ron Kaminkow, Dec. 6, 2022
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