COLA: A Pay-Day Loan from the Railroad?

June 8, 2007: What if your employer told you that your raises for the last two years were just a loan? That’s just what happened to rail Teamsters in the BLET.

The proposed national agreement between the BLET and the freight carriers says that cost-of-living adjustments for 2005 and 2006 were just loans from the carriers to the engineers—and the carriers want the money back.

That’s like turning the carriers into a pay-day loan store.

The Railroad Comes Collecting

Even worse, our national negotiating team is helping them collect. The proposed agreement will let the carriers deduct the “loan” from engineers’ retro checks.

If the contract passes, an engineer who worked 160 hours a month for the last two years will owe the carriers $1,749. But most engineers work more than that, and they could owe over $2,000.

Engineers have been waiting since 2004 for a new contract—and a wage increase. COLA raises have helped engineers keep up a little with inflation. It’s a real double-cross to have to pay back that money, especially when the carriers are making record profits.

“When we joined the Teamsters, our leaders said that they’d put Teamster Power to work for us,” said Chad Black, an engineer on the Union Pacific. “Now we’ve got to pay back our wage increases for the last two years. Our negotiators should never have agreed to that.”

Can’t we do better? The negotiators should have pushed to turn the COLA “loan” into a real raise. Instead, rail Teamsters got a weak contract—and a humiliating loan.


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