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President Biden averts railroad strike amid labor dispute

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Yahoo Finance's Dani Romero discusses the latest on a freight railroad labor dispute that escalated with President Biden stepping in to avoid a strike.

Video Transcript

AKIKO FUJITA: President Biden has stepped in to avert a railroad worker strike, which comes as rail carriers and worker unions have been embroiled in a contract dispute since January of 2020. Let's bring in Yahoo Finance's Dani Romero, who's been following the story for us. And Dani, we don't always talk about these rail strikes, but this is something that could have broader implications for consumers, too.

DANI ROMERO: Yeah, you're absolutely right. But like every labor dispute, it really goes back to those sticking points around wages and benefits. And for the past two years, these rail workers have been asking for an increase in wages.

Obviously, the pandemic, rising inflation, as well as labor shortages have really fueled this movement right now and have wanted them to increase their wages. Like you said, since January of 2020, these rail workers were set to walk off the job on May. But like you said, President Biden stepped in, established this board to really help mitigate and get to the bottom line of this contract.

But I spoke with one of the union representatives that tells me that they feel like they have enough evidence. And as well, they are willing to make their case to say, I do need that wage increase right now. But the board will have to investigate and bring that back within the next 30 days to Biden.

BRIAN CHEUNG: Yeah, a very serious issue because of the inflationary impact of all of this, right? If you imagine there's some sort of strike and some hold up in the way that our nation's infrastructure for transportation works, that could lead to further price increases?

DANI ROMERO: Yeah, not only that, but you might not even get your chicken. I mean, the implications are really, really high here and if an agreement isn't made. Rail accounts for 28% of the total US freight movement. And not only that, 52% of rail traffic consists of bulk commodities. That's energy, materials, food, minerals, agriculture-- you name it.

And if you look at the Port of Los Angeles, 28% of all cargo that goes through that port is on a train. So, really, tensions have been growing between agriculture companies and engine-- excuse me, energy companies about the delays, as well as the limitations on this rail transportation. So it'll really come down to the board to really find out and get to the bottom of this.

AKIKO FUJITA: What kind of timeline are we talking about?

DANI ROMERO: Well, 30 days.

AKIKO FUJITA: 30 days. OK, we'll be watching.

BRIAN CHEUNG: I can't. Chicken's already so expensive.

AKIKO FUJITA: Oh, you're thinking about the chicken.

BRIAN CHEUNG: Sorry, yeah, I'm held up on the chicken.

DANI ROMERO: You're on chicken.

BRIAN CHEUNG: I was like, whoa.

AKIKO FUJITA: Yeah, I mean, you're right. I mean, there's already plenty of headwind there.

BRIAN CHEUNG: Trading down to tofu.

AKIKO FUJITA: I don't know. Is tofu carried on rail?

DANI ROMERO: Well, food?



BRIAN CHEUNG: All food. Yahoo Finance's Dani Romero, thanks so much for the break--