The average total annual compensation of rail workers involved in the most recent round of national negotiations is projected to be more than $160,000 by the end of the new labor agreements. This includes an average of more than $110,000 in wages per year plus about $50,000 in medical, retirement, sickness, and other benefits.
FREIGHT RAILROAD EMPLOYEES: AMONG THE BEST PAID IN THE NATION
Employees in the rail transportation industry are among the most highly compensated in the nation. When examining all U.S. rail transportation employees, including freight railroad employees, rail employees ranked above 94 percent of the approximately 130 million employees in other reported industries in average annual compensation as of the start of the last bargaining round (BEA 2020 data). The new agreement, which provides 24 percent pay increases and maintains platinum-level health benefits, ensures rail employees will maintain their favored position in the nation’s labor market well into the future.
On average, a Class I rail employee covered by the new national agreements:
- Will receive approximately $111,000 in annual wages by the end of the agreement
- Will receive medical, retirement, and other benefits worth almost $50,000 each year. This includes Railroad Retirement benefits, which can exceed Social Security benefits by a large margin and are funded largely by the railroads
- Pays only about $310 per month in employee contributions for platinum-level family medical coverage
- Receives 11 paid holidays plus up to four personal leave days or, in lieu of holidays, up to 12 personal leave days
- Receives three weeks of vacation each year. More senior employees receive up to five weeks of vacation
- Is eligible for paid sickness benefits under a federal “RUIA sickness” program that is funded by the railroads and administered by the Railroad Retirement Board
- Some employees also have paid sick days or participate in a supplemental sickness benefit program that also is funded by the railroads and provides about 70% income replacement starting after four days of illness and continuing for up to a year
Substantial Paid Time Off and Robust Paid Sickness Benefits
Railroad employees receive substantial paid time off each year, as well as generous paid sick leave benefits. Excluding time off covered by sickness benefits, the average employee receives 25-29 days of paid time off depending upon craft, with the most senior employees receiving 37-39 days of paid time off.
Historically, some unions have negotiated for paid sick days while others have negotiated for a “Supplemental Sickness Benefit” that prioritizes generous long-term sickness benefits over payment for short-term absences. However, since the most recent round of national bargaining was concluded in December 2022, the carriers represented on the National Carriers’ Conference Committee (NCCC) have reached more than 40 agreements to extend individual paid sick days to employees who previously did not have them. At present, most unions at the NCCC carriers, representing 63% of all craft employees, now have individual paid sick days in addition to the longer-term paid sickness benefits already in effect across the industry. While not all agreements are the same, they are all the result of bargaining, just as they should be – and discussions with the unions that have not yet reached individual paid sick day agreements continues.
High Wages Over Long Term Careers with Robust Retirement Benefits
In addition to high pay, significant paid time off, and exceptional benefits, railroad employees enjoy longer careers than workers in other industries. Railroad unionized employee average tenure is more than about 14 years, and median tenure is 13 years. By comparison, the United States Department of Labor reports that the median tenure for private sector workers generally is 4.1 years (as of January 2022).
Finally, railroad retirees receive substantial retirement benefits because they are covered under the Railroad Retirement Act, not the Social Security Act. In the fiscal year ending September 30, 2021, approximately 519,000 beneficiaries received $13.2 billion in retirement 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.