Why America’s Railroads Refuse to Give Their Workers Paid Leave
nymag.com
nymag.com
> the seven dominant North American railways had a combined net income of $27 billion, nearly twice their margin a decade ago. In the interim, the railways have collectively doled out $146 billion in dividends and stock buybacks while investing only $116 billion into their businesses.
7 sick days, which is laughable, but this is all they want. How the government can even think about taking the companies side here is totally outside my understanding.
The cynic in me says people have forsaken their local and national governments and this is the fruit of their inattention. Democracy and electing representatives requires work from the citizens. Want politicians to vote for more paid leave for rail workers? Write your representatives and make it an issue you vote upon over a period of time. Also put aside the echo chambers and study reality. Facts are the lifeblood of this country so learn them and shun shameful liars and grifters.
And ditch the animosity. No more “owning the libs”, no more sitting back and saying your government is failing. Ie no more “America in decline”-ism aka “decline-ism”. No more silly platitudes that masquerade as progress but amount to letterhead activism. Do some real work for the better of your fellows for an extended period of time.
Edit-Treat others the exact, one correct way to treat each other. As ends unto themselves and never as means to ends. That would demand more than simply adding some pronouns to vocabulary and would include things like paid leave, health care, and livable wages. Insisting upon basic quality of life measures for all workers and citizens. It’d also look like respecting each other enough to, if pressed, agree to disagree when nothing else can be agreed.
Edit-It’d also look like always plunking down a 20% tip on your fast food orders and restaurant meals. Treating the UPS delivery person with dignity and gratitude. Ceasing the road rage. Etc.
And of course it was Ronald Reagan who began the regulatory capture of the SEC by appointing a Wall Street executive to head it. So much of what’s wrong can be traced back to Ronnie.
The reason they were liberalized, despite all the sputtering about "Reagan", is that safe harbors were added that required the amount of issuance to not exceed a fraction of the average daily volume so that it couldn't be used to manipulate market caps. Merely the raising or lowering of the price per share is not manipulation if the market cap is unchanged: businesses are allowed to split and reverse-split shares as well -- or do you also view that as "manipulation"?
Watching some people obsess about share buybacks is truly funny, because you have the worst possible set of bad takes happening on this one issue. Of all the things to worry about -- e.g. Fed puts, the fact that banks have lower funding costs and yet can compete against retail investors, the fact that we have this artificial distinction between long term and short term gains creating big write offs, lawmakers getting rich via trading, etc. So many areas of reform are needed, yet there is this maniacal focus on share buybacks by people who don't really understand what is wrong with them but they just know it's fishy. It's truly the issue that has launched 1000 angry Mother Jones editorials by people who've never set foot on a trading floor -- when fewer things are more harmless in our shark-infested capital markets than share buybacks.
Investing contains risks not suitable for everyone, and if you can't understand those risks ahead of time, perhaps you shouldn't be investing.
If you do, there is a high likelihood that you'll eventually get really burned (lose money) and have only yourself to blame.
Stock buybacks primarily enrich executives over the shareholders because much of their compensation is derived from it.
Many companies, to avoid leveraged buyouts (hostile takovers) must carry a high debt to cash ratio.
What happens to a brittle system, when there is a sudden economic event, and you were already up to your gills in debt (by default), and you funded the buyback with more debt? How is that terribly different from what happened with the Penn Central bailout and bankruptcy?
Of course, this brings to mind the saying: "Your failure to plan is not my emergency."
The activist investors—a hedge fund in this case, kick started a toxic environment—are the ones that destroyed the more traditional management and squeezed out more profits.
“ A decade ago, the activist investor Bill Ackman won a proxy battle at Canadian Pacific and proceeded to replace its management with a team led by Hunter Harrison, the railway executive who’d pioneered P.S.R. After imposing the gospel of “more with less” at Canadian Pacific, Harrison left to spread the good news to the freight giant CSX. At each firm, P.S.R. succeeded at generating higher returns. ”
In order to know how you got to this point and understand the driving important factors (so you know where you are going) you need to know what came before you. This is the first thing any intelligent, scientist or engineer looks at, what problems were there, and how were they solved.
Those points in history were three pivotal times for the sector, some continue to still be issues. You google railroad issues, and they are front and center but no mention?
1966 enacted additional rail regulations, and those regulations always come at a additional cost. A business operates by generating above cost for a profit.
Around 1970, Penn Centrals Board of Directors had a liquidity problem as many others had at the time, and the only people willing to provide a loan essentially set up an elaborate scheme to take control of the board, issue loans to themselves, and then seek a bailout by buying up the first right holder bonds in bankruptcy. This was used to bilk investors who received no disclosures normally required under securities law due to industry exceptions, despite significant conflicts of interest no one to my knowledge was ever punished for this fraud.
This directly impacted many in the sector as many fortunes were lost, and rail was generally seen as a bad investment by the general public thereafter (and still is due to subsequent regulation and margins).
1996 STB was chartered, with additional regulation capping rail shipping rates either by ICC or STB. The companies generally can't charge more despite rising costs and devalued currency.
Many rail companies can't even afford to have two engineers per run, god forbid something impairs the engineer during one of those runs. They can't even afford security guards (to prevent slow moving train theft).
If the model no longer works, and can't change, what kind of solution will there ever be.
Rail stops, you then have issues with food, water, and energy which spirals out from there, historically speaking.
The history is also muddied because of the car-heavy policies of the times.
Consider that trucks are the single biggest contributor to road damage, but regular drivers subsidize most of the cost.
Whereas rails own the tracks and have to maintain it themselves.
From what I’ve read recently, freight rail has the reputation and niche of being the cheapest way to ship on land despite all of this, but it’s slow and the cost cutting have enabled unintended side effects like rail theft.
I doubt the answer is to cut costs and headcount further; and perhaps factoring the cost of emissions can make rail more competitive.
It is not something that should be gambled with.
Why would you think this would ever work?
If you tried to go out and build a skyscraper with no engineering knowledge, how well do you think that would go?
- The most dense train network in the world (5,323 km)
- 100% electrified, which was decided in 1913
- The longest train tunnel in the world (57,1 km), completed in 2016 [1]. To ensure the safety of passengers it required a lot of engineering including a system that scans every train[3] at speed to make sure things are in order before going into the tunnel.
- Trains in 2021 where 91.9% on time and 98.9% of connection where made [2]
Some things work much better when they are state owned. Specifically infrastructure such as roads, trains, telecommunication, water, electricity.
[1] https://en.wikipedia.org/wiki/Gotthard_Base_Tunnel
[2] https://reporting.sbb.ch/punctuality?sv_lang=3&sv_lang_chang...
>you've not addressed any of the key issues that occur in socialist systems.
Disingenuous and nonsensical.
Why should anyone assign any credibility to what you say when you've been disingenous yourself upfront and put your own words in other people's mouths.
Key elements of socialism are centralized power structure, lack or eroding of property rights, and issues often revolve around corruption, monopoly (which is often called capitalism, though its not), seizures, lack of accountability, and the limited production receives little benefit from divisions of labor tending towards the lowest common denominator.
Why should anyone listen to you if you can't even add anything to the conversation (likely because you don't know)?
The subject at hand is, whether or not it is a good idea for the government to operate the rail system, to which you flatly cried was socialism.
Is the US postal service socialism? Is the fire department socialism?
Is it really your position that these institutions are inherently corrupt?
Very few people would seriously defend that position who aren’t ardent ideologues.
https://theexplanationproject.fandom.com/wiki/Directive_10-2...
There have been no significant increases in labor pay matching inflation for years (every year workers have taken a loss).
Additionally, the remainder of the industry is as good as nationalized which started with legislation in 1966, and worsened with the charter of the Surface Transportation Board in 1996.
Railroads can't raise their own rates to increase their profit, despite costs. Little investment has been forthecoming for the industry prompting loans from the government which don't fix the fundamental problem.
There were even points where railroads had to have a bailout because of fraud on the bankers parts, which as far as I know was never actually punished.
The simple fact is, inflation hits everyone, rates aren't matching inflation, and of course people won't continue to work when their livelihood is threatened.
Ironically, this is a problem you only generally see in centralized, socialist systems. The next clear step is Directive 10-289.
https://theexplanationproject.fandom.com/wiki/Directive_10-2...
If you were educated you would realize there is a fundamental limit under which real purchasing power cannot go below for any length of time, and rate of pay failing to meet inflation yearly for several decades would eventually reach a breaking point.
Paid time off simply translates into purchasing power, and the fact they can't hire more people because almost no one is willing to enter the industry because there's no profit to be made, and yet everything depends on it running smoothly. They can't raise their prices, have two conductors (god forbid something happen to one in-transit) or even hire security guards to ensure people don't steal from slow moving trains.
If you have the inkling and want to educate yourself, I'd recommend you start with The Wealth of Nations, by Adam Smith 1778.
It describes the fundamentals of why our economy worked, and why it has slowly stagnated with the increased legislation (regulation), consolidation (monopolization), and frauds of various entities.
After that, a primer on socialism's key elements (i.e. centralized power structures, (lack of)property rights, monopolistic industry, etc,) and its major failings which is why most people say its responsible for more deaths than any other system (Nazis, Mao, etc).
From there, Wealth and Poverty of Nations by Landis and you should then be able to competently speak.
I agree, nationalize the railroads. Not reading the rest of your turgid weirdo libertarian spew, have a great weekend :)