Time has come for nationalization of railroads

Railroads in America were nationalized during World War One which was was undone in 1920. 

“Since the North American private rail industry has shown itself incapable of doing the job, it is time for this invaluable transportation infrastructure – like other transport modes – to be brought under public ownership,” reads a letter recently published by the Railroad Workers United (RWU) labor union.

The RWU officially endorsed public ownership of railroads during their monthly meeting in October of 2022. The resolution cites inefficiencies caused by the current for-profit model. Public ownership of railroads has long been discussed in the United States. Railroads were nationalized during World War One, but were re-privatized in 2020, despite a majority of railroad workers supporting continued nationalization.  

The derailment of another Norfolk Southern train this Saturday underscores the need for better management of railroads and in the United States. Poor safety standards, abysmal working conditions and record profits have been a disaster and now is the time to recognize the railroad industry as too important to be managed by private investors. The only solution is nationalization, otherwise known as public ownership.

The goal of railroads should be getting freight where it needs to go, not making a profit. Yet, the railroad industry is the most profitable industry in America. The 5 most profitable firms earned over $70 billion in 2019. Public ownership would mean that the excess profit would be reinvested in the industry, either through better working conditions or infrastructure improvements. Removing the need to earn profit would also lead to better safety precautions since this profit is coming at the expense of safety regulations.

Public ownership is gaining support among railroad workers who feel exploited and abused by the industry. National Vice President of the Transportation Communications Union, Matt Hollis, testified at the federal Surface Transportation board. He stated, ​“I’ve watched as private equity firms have acquired controlling stakes in railroads only to use their power to deploy business models that extract as much wealth as possible, to the detriment of the railroads’ workers, their customers and ultimately the public interest.”

Precision Scheduled Railroading (PSR) is the industry practice responsible for the poor working conditions of railroad employees. Freight is transported as it comes into depos in an attempt to reduce cost. Supply chain planning is replaced with a chaotic system where workers are on call 24/7. Railroad unions were on the verge of striking last year after the companies refused to give their workers guaranteed sick days. To avoid a nationwide shutdown of the economy, Congress enforced a new agreement on the workers. Their pay was raised, but they were only awarded one sick day, well short of the 15 days that were initially demanded.

There are so many other issues worth mentioning. Lack of safety regulations leads to trains derailing and releasing toxic chemicals. Many rail lines run next to rivers or other large bodies of water, meaning that these could be contaminated in the future. Innovation in the industry has stagnated. Other countries are building high speed rail lines and electronic trains, increasing efficiency and lowering emissions of greenhouse gases.

Private rail companies do not even run passenger lines because they are not profitable, leaving AmTrak, America’s state-owned and for-profit rail corporation, as the only company transporting passengers. AmTrak is plagued by delays and slow travel times because the majority of track in the country is owned by private companies that prioritize their own trains over AmTrak’s.

Clearly, the rail industry is vital to the nation, otherwise Congress would not have been so quick to avoid a nationwide rail strike. Workers are also just as vital. So why do we allow them to be managed by Wall Street financiers who are only interested in making billions of dollars instead of ensuring that America’s freight is delivered safely and efficiently?

Public ownership would mean including workers in the decision-making process, improving their conditions as a result. Long-term planning would become the norm, leading to more efficient technologies being adopted. Removing expensive investors whose only purpose is to extract wealth would streamline the industry and cut a significant amount of cost.

For the sake of all of us, now is the time to nationalize the railroads.

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