Total Compensation

Employees in the freight rail industry are among the most highly compensated in the nation. As reflected in the most recent data from the U.S. Commerce Department, even in today’s competitive marketplace, freight railroads offer long-term career opportunities with pay and benefits ranked in the top seven percent of American industries. With the U.S. economy struggling and demand for rail service diminishing in some critical areas, the parties must take this business reality into account as they negotiate compensation going forward.

Total Compensation

In 2015, total annual compensation (pay and benefits) for Class I freight rail employees covered in the current round of national bargaining averaged approximately $113,000. This is almost 55 percent higher than the total compensation for the average full-time U.S. employee ($73,000) that year.

Furthermore, wages in the railroad industry have provided employees robust gains in purchasing power. Between 2005 and 2015, their compounded wage increases from national bargaining totaled 42 percent. Their annual wage increases averaged more than 3.5 percent during that time period, and outpaced inflation by 50 percent.


Finally, railroad retirees receive substantial retirement benefits because they are covered under the Railroad Retirement Act, not the Social Security Act. In fiscal year 2015, approximately 581,000 beneficiaries received $12 billion in benefits from the system. Due to the structure of the Railroad Retirement system, these benefits are significantly higher than those provided by Social Security, and railroads bear a much larger share of taxes to fund these enhanced benefits.

Long-Term Careers

In addition to high pay and exceptional benefits, railroad employees enjoy longer careers than workers in other industries. On average, railroad employee tenure is nearly 13 years; their median tenure is just under 10 years. For comparison, the median tenure for private sector workers is just over four years, according to the U.S. Labor Department.

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