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Railroads are slashing workers, cheered on by Wall Street to stay profitable amid Trump's trade war
Business
Railroads are slashing workers, cheered on by Wall Street to stay profitable amid Trump’s trade war
By Heather Long
Jan. 3, 2020 at 4:18 p.m. EST
{snip}
While the U.S. economy overall is growing moderately, the railroad industry is a cautionary sign of the ongoing pain in the industrial sector and the deep structural changes underway in the economy that are eliminating middle-class jobs.
President Trump’s trade war has hit agriculture and manufacturing hard, causing lower demand for companies that move freight. But railroad stocks soared in 2019 after rail executives embraced automation and cost-cutting to remain profitable, doubling down on the idea that rail’s future entails longer, faster trains and fewer workers.
More than 20,000 rail workers have lost their jobs in the past year, the biggest layoffs in rail since the Great Recession and a nearly 10 percent decline in rail employment, according to Labor Department data through November.
Volumes are down so much on major American railways in the past year that some economists say the nation is in the midst of a “freight recession.”
Freight declines have typically foreshadowed trouble for the broader economy because they’re a barometer of how much stuff is heading to market. Every economic downturn since World War II has been precipitated by nose-diving freight traffic. There have also been periods such as 2015-16 when manufacturing, trucking and rail suffer, but the rest of the economy keeps growing.
{snip}
Another key part of the efficiency push is running longer trains. The average train length has increased 25 percent since 2008 to about 1.4 miles, according to a Government Accountability Office report published in May. ... Workers across the country report an increase in hitching two trains together on their routes. ... “They found they can hook two trains together and cut a crew,” said a Union Pacific engineer based in Cheyenne, Wyo., who spoke on the condition of anonymity out of fear for his job.
{snip}
Heather Long is an economics correspondent. Before joining The Washington Post, she was a senior economics reporter at CNN and a columnist and deputy editor at the Patriot-News in Harrisburg, Pa. She also worked at an investment firm in London. Follow https://twitter.com/byHeatherLong
Railroads are slashing workers, cheered on by Wall Street to stay profitable amid Trump’s trade war
By Heather Long
Jan. 3, 2020 at 4:18 p.m. EST
{snip}
While the U.S. economy overall is growing moderately, the railroad industry is a cautionary sign of the ongoing pain in the industrial sector and the deep structural changes underway in the economy that are eliminating middle-class jobs.
President Trump’s trade war has hit agriculture and manufacturing hard, causing lower demand for companies that move freight. But railroad stocks soared in 2019 after rail executives embraced automation and cost-cutting to remain profitable, doubling down on the idea that rail’s future entails longer, faster trains and fewer workers.
More than 20,000 rail workers have lost their jobs in the past year, the biggest layoffs in rail since the Great Recession and a nearly 10 percent decline in rail employment, according to Labor Department data through November.
Volumes are down so much on major American railways in the past year that some economists say the nation is in the midst of a “freight recession.”
Freight declines have typically foreshadowed trouble for the broader economy because they’re a barometer of how much stuff is heading to market. Every economic downturn since World War II has been precipitated by nose-diving freight traffic. There have also been periods such as 2015-16 when manufacturing, trucking and rail suffer, but the rest of the economy keeps growing.
{snip}
Another key part of the efficiency push is running longer trains. The average train length has increased 25 percent since 2008 to about 1.4 miles, according to a Government Accountability Office report published in May. ... Workers across the country report an increase in hitching two trains together on their routes. ... “They found they can hook two trains together and cut a crew,” said a Union Pacific engineer based in Cheyenne, Wyo., who spoke on the condition of anonymity out of fear for his job.
{snip}
Heather Long is an economics correspondent. Before joining The Washington Post, she was a senior economics reporter at CNN and a columnist and deputy editor at the Patriot-News in Harrisburg, Pa. She also worked at an investment firm in London. Follow https://twitter.com/byHeatherLong
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