Railroad deregulation

Michael Belzer (1998), Commentary on Railroad Deregulation and Union Labor Earnings, in Regulatory Reform and Labor Markets (James Peoples, editor), Boston, Kluwer Academic Publishers. 

James M. MacDonald and Linda C. Cavalluzzo (1996), Railroad Deregulation Pricing Reforms, Shipper Responses, and the Effects on Labor, Industrial and Labor Relations Review, Vol. 50, pp. 80-91. 

In the remainder of this chapter, we first review the regulatory history of the railroad industry. We then explore the relationship between economic deregulation and safety. 

Note, however, that the interpretation of the observed safety trends since deregulation is open to some speculation. It seems clear that poor financial health of railroads in the 1960s and 1970s resulted in reductions in... 

The overall safety performance of the railroad industry tends to be dominated by the performance of the largest railroads. Therefore, investigating the relative safety performance of the smaller railroads may shed further light on the relationship between economic deregulation and safety performance. In particular, some of the financial distress in the railroad industry was attributed to the requirement to continue service on improfitable lines. Once railroads could abandon these unprofitable lines, financial conditions improved and so did safety performance. However, abandonment of small lines resulted in a proliferation of small railroads that provided service on lines abandoned by the larger Class I railroads. Many of these smaller railroads are non-union and are able to operate at a profit because of lower labor costs (Savage, 1998). 

Just as the railroad industry was being deregulated economically, the FRA simultaneously increased safety regulation. Savage (1998) provides a... 

FRA s traditional site-specific safety inspection program has produced substantial gains in railroad safety with real benefits for the American people... These substantial safety improvements occurred even as freight railroad traffic and train density increased to record levels following economic deregulation of the industry as a result of the Staggers Rail Act of 1980. 

In order to examine the impact of economic deregulation on safety in the railroad industry, the existing literature provides a good starting point. Nevertheless, it leaves several questions imanswered. In particular, studies to date do not adequately address issues related to the impact of deregulation and the subsequent industry restructuring on human performance factors, such as ... 

The major benefit of deregulation is that railroads are better able to apply the money they have to research and training. 

With respect to employee injuries, we are now dealing with a better-trained and educated workforce. It takes money to train workers... Line abandonment also helped— the less railroad you have to maintain, the more you can focus on maintenance and improvement of the rail that remains. Deregulation allowed railroads to put more money into capital maintenance and to become more efficient. 

Another Class I manager was not willing to claim that deregulation had resulted in an unequivocal improvement in safety. He felt that the impact of deregulation on safety was railroad-specific, and depended on whether the... 

How well has the Federal Railroad Administration performed since deregulation ... 

Which played a bigger role in improving safety performance, deregulation or the Federal Railroad Administration ... 

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