Total Compensation

 

Total annual compensation for Class I freight rail employees covered in the new round of national bargaining averaged approximately $130,000 in 2021, including pay and benefits — much higher than most U.S. industries.

FREIGHT RAILROAD EMPLOYEES: AMONG THE BEST PAID IN THE NATION

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

  • Has been employed more than 14 years by their freight railroad
  • Received approximately $130,000 in total annual compensation (2021)
  • Received wage increases totaling 38 percent from 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 (on average)

Employees in the rail transportation industry are among the most highly compensated in the nation. As of 2020, when examining all U.S. rail transportation employees, including freight railroad employees, they ranked above 94 percent of the approximately 130 million employees in other industries in average annual compensation (BEA 2020 data).

The total annual compensation of the Class I freight rail employees covered in the current round of national bargaining averaged approximately $130,000 in 2021. This includes wages, health care and employer retirement contributions. This is almost 57 percent higher than the average full-time U.S. employee (approximately $84,000) for 2021.

In terms of wages, the average annual wage earned in 2021 by freight rail employees in the current round of bargaining was approximately $88,000, which is 52 percent higher than the equivalent annual 2021 wages and salaries of approximately $58,000 for the average U.S. Civilian worker (as reported by BLS – EMPLOYER COSTS FOR EMPLOYEE COMPENSATION – December 2021).

Railroad employees have also experienced significant gains in purchasing power that far outpaced inflation. From 2009 through 2019, during a long period of relatively low inflation, their compounded wage increases from national bargaining totaled 37.83 percent, which was about double the rate of inflation (GWIs 37.8 percent vs 19.2 percent inflation).  In other words, railroad employee wage increases have averaged – year in and year out, whether inflation is high or low – around 3.4 percent after compounding.

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. Railroad employee average tenure is 14.6 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.

Finally, railroad retirees receive substantial retirement benefits because they are covered under the Railroad Retirement Act, not the Social Security Act. In fiscal year 2021, approximately 519,000 beneficiaries received $13.2 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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