U.S. Labor Secretary Marty Walsh joins Yahoo Finance Live to discuss the news of railroad companies and unions reaching a tentative labor deal to avoid a major strike and why the agreement will benefit workers.
- Well, this tentative deal is a big one also for the Biden administration. President Biden hailing the agreement as, quote, a great deal for both sides, while also stressing just how important it was to get an agreement done.
JOE BIDEN: This agreement can avert a significant damage than any shutdown would have brought. Our nation's rail system is the backbone of our supply chain, everything you rely on. And it's hard to realize this from everything from clean water, to food, to gas, to everyday. I mean liquefied natural gas to everything. Every good that you need seems to end on a rail getting delivered to where it needs to go.
- Well, earlier today, I spoke with Labor Secretary, Marty Walsh, who played a very key role in these talks.
MARTY WALSH: Well, it's also a big deal for America and moving products around this country. I think it's-- the number's about 40% of all products in this country gets moved around by rail. So it's a very important aspect of our product. This contract. And I agree with President Biden.
It's a contract that respects the workers. It's a contract that helps the carriers and allows us the opportunity to avert what would be. I think, a national catastrophe, if we did not get to that agreement last night, or early this morning.
- And Secretary, you were a key player in these negotiations over the last 24 hours, 36 hours, or so. How much pressure did you have to place on the unions in order to reach this deal before the deadline?
MARTY WALSH: Well, I don't know if I felt a little pressure. But there was a little persuasion. And really, the key to this was keeping sides at the table, and making sure that as they go through this line by line any changes that were there that they address that change right away.
And I think that was key, and having willingness on both sides. I mean this contract negotiation has been going on for over two years. So you know, it wasn't necessarily a love fest when we started the night. But at the end of the night, as we got towards the end of the contract, there was a lot of mutual respect there.
- How do we make sure that we're not in a similar position here in just five years from now?
MARTY WALSH: Yeah, it's actually less than that. This contract expired a couple of years ago. So the next contract is up in 2024.
So what I said at the end of my conversation last night with both the carriers and the unions is that you need to start this conversation earlier. And you need to make, sure that the key is staying at the table. You know, you're talking about a very complex contract. 12 different collective bargaining agents units. And then, within those, you collective bargaining agreements in the unions, there's different types of workers there.
So you have engineers, you have maintenance, you have all kinds of different folks there. So it's really-- it's signal people, people fixing the track. So it really is about starting the conversations earlier. And I think a lot was learned here with this agreement. I think a lot of people understood that there's a need to continue, have a better dialogue.
- And Secretary, a key part of this agreement are the wage hikes that are included. It's the biggest raise for the workers that we've seen in more than four decades, a 24% increase in pay during the course of this contract. We know that there has been a huge problem here from the carriers, just in terms of attracting and retaining the workers that they had. How confident are you that this is going to significantly improve that situation?
MARTY WALSH: Well, I'll tell you. What the carriers agreed to last night, and with the leadership of the unions negotiated, this is a great tool to attract talent to work on the rail. And I know they're down significant numbers in different parts of the country.
And I think being able to explain about sick time, being able to explain about taking time off to go see a doctor, those are benefits that you can attract people to your company. Looking at the wage wages, and looking at all the other things that we talked about last night, that's really important for companies to be able to, not just attract, but retain workers as well. So I think it should be a big, big help. And I also offered last night, through the Department of Labor, to use the American Job Centers to help recruit some workers for the rails.
- And certainly, union activism has surged under President Biden. What does this tell us just about the future in terms of, should we expect more worker company types of agreements? And what do you think that's going to look like in other fields?
MARTY WALSH: Well, what I'll say to this is last night as the negotiate was going on, I kind of sit back a little bit and watch two sides talking. And I think it's really important that both sides, union and management, where there is collective bargaining right now, to set the tone, to let people know that there's respect, to let people know that there's an opportunity here to, not just support and benefit the worker, but also benefit the company. And I come from out of the labor movement. And in my previous roles as the building trades head, the building trades of Boston, the mayor of the city of Boston, I always tried to understand that you have to respect both sides.
Because without employers, you don't have employees, and you don't have an opportunity to represent people. And without employees who can help your company be successful, you're hurting as well. So I just hope that a lot of people will learn from these, to continue to have those dialogues and conversations. And there needs to be a mutual respect. Because if the train companies are failing, then the workers that are working, that got that contract yesterday, that doesn't benefit them at all, and likewise.
- And Secretary, this agreement coming at a critical time here for the economy. We've got the Fed meeting next week. There are calls out there that we could potentially see a 100 basis point hike. Can the jobs market withstand an even more aggressive Fed than maybe we initially thought?
MARTY WALSH: Well, certainly the last three months-- actually the last year and a half, have been great job growth in the country. I think two months ago we had over 500,000 jobs. Last month, we had 350,000 jobs.
We're still seeing help wanted signs. People want to hire people. So I still-- I'm very hopeful that we're going to continue to be seeing people be hired, people moving, maybe from one job to another job. So what we want to do in the Department of Labor is double down on workforce development, job training, and apprenticeships to make sure that we're preparing workers. So when companies want to expand or grow in a particular area, that there's work is there for them to hire
- And Secretary, the labor market has shown signs that it is beginning to cool. Although it does remain very strong, economists, we've heard from a number of economists on Yahoo Finance over the last several months saying that the job market needs to cool significantly here in order to get inflation under control. How concerned are you to have a cooling jobs market heading into the midterms?
MARTY WALSH: Well, I'm concerned about having a cooling job market heading into the holidays. Many people in this country need to work. They need to be able to put food on the table.
They need to be able to make sure they can support their families. And as the holidays come forward. So I think there's an opportunity for us to continue to bring prices down, and pressure on prices down, as well as adding jobs to the economy.
- And what does that look like, Secretary?
MARTY WALSH: We're seeing it right now. I mean, we'll see what happens next week with the Fed. But we're seeing-- we didn't see as big of a drop in inflation. We didn't see a drop in inflation, I should say this week.
But what we're seeing is gas prices coming down. And it's an all out government approach here, trying to bring these costs down across the board, whether it's gasoline or oil, whether it's supply chain. I think we dodged a very, very big challenge yesterday, and last night, and early this morning. Because if we were striking tonight, we would be worried about inflation and recession. Because tens of thousands of people outside of this train industry would have been laid off, and we would have seen great challenges all across our country.
- The estimates out there were that it could have cost the US economy $2 billion a day if in fact we did see that strike. Secretary Marty Walsh, thanks so much for joining us.
MARTY WALSH: Thank you.