Total Compensation

 

Total annual compensation for Class I freight rail employees covered in the new round of national bargaining averaged approximately $129,000, including pay and benefits — much higher than many U.S. industries.

FREIGHT RAILROAD EMPLOYEES: AMONG THE BEST PAID IN THE NATION

On average, an Class I rail employee covered in the current bargaining round:

  • Has been employed over 13 years by his/her freight railroad
  • Received approximately $129,000 in total annual compensation (2019)
  • Received wage increases totaling 38 percent in the period 2009 through 2019
  • Received 3.4 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 (the most recent full year for which non-railroad data is available), 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.

 

As noted above, the total annual compensation of the Class I freight rail employees covered in the current round of national bargaining averaged approximately $129,000 in 2019. This includes wages, health care and employer retirement contributions. This is almost 59 percent higher than the average full-time U.S. employee ($81,200) for 2019.

In terms of wages, the average annual wages earned in 2019 by freight rail employees in the current round of bargaining was approximately $90,000 which is 35 percent higher than 2019 median U.S. household income of $66,738 (as reported by BLS).

Railroad employees have also experienced significant gains in purchasing power that have far exceeded inflation. From 2009 through 2019, their compounded wage increases from national bargaining totaled 37.83 percent, about 3.4 percent annually, and outpaced inflation by more than 97 percent. These figures include the approximately 125,000 employees who are represented in the current national collective bargaining round.

From 2009 to 2019, employee general wage increases nearly doubled the inflation rate (GWIs 37.8 percent vs 19.2 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 13.7 years; their median tenure is 13 years. For comparison, the median tenure for private sector workers is 4.2 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 2018, approximately 540,000 beneficiaries received $12.7 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.

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