Railroad contract dispute calls for 24% raise to workers

Labor reporter Dani Romero details how railroad workers are negotiating a 24% raise in labor contracts for major rail companies as worker shortages and supply backlogs continue to loom over the supply chain.

Video transcript

- All right, there's a new plan to end a railroad contract dispute. It involves giving workers pay bumps and thousands of dollars in bonuses. Yahoo Finance's Dani Romero has the details. Hey, Dani.

DANI ROMERO: Hey, Dave. So the special board that was appointed by President Biden, they have finally drafted a new agreement between the railroad companies and the rail workers. And in that new agreement, it includes that workers get a 24% raise, and as well as a $5,000 bonus over the life of the contract, which is something that workers have been advocating for. The union had been asking for a 31% raise, while the rail companies were offering a 17% raise compounded throughout the agreement.

The deal also recommended keeping the same health benefits, which is something that the rail workers were also wanting. But from this point on, now it goes to the rail workers, rail companies, and the workers to take these recommendations to the negotiation table and then have the next 30 days to really hammer out this deal. But if the two sides can't come to an agreement, then by federal law they can go and they are allowed to strike, which is something that Congress will likely intervene. And it's unlikely that it would happen.

But during a press conference, the executive director of the Port of Los Angeles, Gene Seroka, he said he responded to this new draft of the deal. And he said that he's actually optimistic that both the rail companies and their workers will find an agreement and come to the table with this. But it is a move in the right direction, especially as workers have gone without a raise since 2019. And this could even make it easier for these rail companies to hire more workers.

But aside from this negotiation, there's also the other negotiation that's happening between the dock workers and the shipping operators on the West Coast. And we got an update in regards to that from the port executive, Gene Seroka. And he just said that they are still going to the negotiation table daily. And they're trying to hammer out this deal.

But, of course, they did come to an agreement on their health benefits. So we'll have to just wait and see what the timeline is on that. It's still unclear. Dave?

- Supply chains desperately need to avert strikes. Dani Romero, thanks.