Total annual compensation for Class I freight rail employees covered in the new round of national bargaining averaged approximately $122,000, including pay and benefits — much higher than many U.S. industries.
FREIGHT RAILROAD EMPLOYEES: AMONG THE BEST PAID IN THE NATION
On Average, an Employee Covered in the Upcoming Bargaining Round . . .
- Has been employed over 12 years by his/her freight railroad
- Received approximately $122,000 in total annual compensation (2018)
- Received wage increases totaling 39 percent in the period 2008 through 2018
- Received 3.5 percent annual wage increases (on average) during that period
- Pays $229 monthly for health care coverage, regardless of family size
- Enjoys 11 paid holidays and three weeks of vacation each year
Employees in the rail transportation industry are among the most highly compensated in the nation. As of 2018, when examining all U.S. rail transportation employees, including freight railroad employees, they ranked above 94 percent of employees in other industries in average annual compensation.
Within the rail transportation industry as a whole, the total annual compensation of the Class I freight rail employees covered in the new round of national bargaining averaged approximately $122,000. This includes wages, health care and employer retirement contributions. This total compensation for freight rail employees is 54 percent higher than the average full-time U.S. employee ($79,000) for 2018.
In terms of wages, the average annual wages earned in 2018 by freight rail employees was approximately $87,000, which is 40 percent higher than 2018 median U.S. household income of $61,937.
Railroad employees have also experienced significant gains in purchasing power that have far exceeded inflation. From 2008 through 2018, their compounded wage increases from national bargaining totaled 39.2 percent, about 3.5 percent annually, and outpaced inflation by more than 85 percent. These figures include the approximate 125,000 employees who are represented in the new national collective bargaining round.
From 2008 to 2018, employee general wage increases nearly doubled the inflation rate (GWIs 39.2 percent vs 21.1 percent inflation).
High Wages Over Long-Term Careers, Robust Retirement Benefits
In addition to high pay and exceptional benefits, railroad employees enjoy longer careers than workers in other industries. On average, railroad employee tenure is 12.5 years; their median tenure is 12 years. For comparison, the median tenure for private sector workers is 3.8 years, according to U.S. Labor Department.
Finally, railroad retirees receive substantial retirement benefits because they are covered under the Railroad Retirement Act, not the Social Security Act. In fiscal year 2017, approximately 574,000 beneficiaries received $12.6 billion in benefits.
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.