Agreement with Rail Carriers Protects Jobs but Eliminates COLA

April 2, 2007: After three years of working without a national contract, the BLET announced a deal with the National Carriers’ Conference on March 5. The new deal eliminates COLA and allows the carriers to pass along health care costs to Teamster engineers.

The BLET has not released the full proposed agreement—only a two-page summary.

Here’s what we know so far:

Wages: Engineers will get a 3 percent wage increase when the deal goes into effect on July 1. That’s on top of a 5.5 percent retroactive wage increase for 2005 and 2006. Wages will go up 4 percent in 2008, and 4.5 percent in 2009.

COLA: The new deal eliminates the cost-of-living adjustments completely.

Health and welfare: Co-pays go up from $15 to $20 for family doctor visits and from $15 to $35 for specialists. Engineers will pay 15 percent of their monthly health-care premiums, up from 14.2 percent. The carriers will adjust these premiums each January of the agreement.

Single-crew operation squashed: The carriers withdrew their requests for single-crew operation and other work rule changes.

“Cost of living—that’s the real sleeper issue,” said Ed Michael, an engineer on the Union Pacific. “If inflation stays low, we won’t feel it too bad. But if anything goes wrong, it’s going to eat our lunch.”

The new contract also fails to control health care costs, a big issue for engineers. In 2006, the average cost of employer health care premiums increased by 7.7 percent—double the rate of inflation. Under the old contract, engineers went from paying $100 a month in 2004 to $148 a month this year.

Under the new contract, the carriers will pass along 15 percent of their total health care cost to employees, and they can raise their rates each January. The contract caps the amount at $200, but only in 2010. There are no other caps. And the rate can go above $200 if the rates in 2009 are higher than that amount.

“Most engineers won’t find out the details of this contract until they get their ratification ballots,” said Harvey Evans of BLET Division 724. “But we need real answers about COLA and health care. Why did the union give up COLA? We’ve been bargaining for three years—can’t we do better than this?”

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