White House announces tentative railway labor agreement

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A tentative deal has been reached by the rail companies and unions to avert a strike that could exacerbate inflationary pressure.

President Joe Biden and Labor Secretary Marty Walsh, in separate statements early Thursday, said a deal has been reached.

“The tentative agreement reached tonight is an important win for our economy and the American people,” said President Joe Biden in a statement.

“These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs: all hard-earned. The agreement is also a victory for railway companies who will be able to retain and recruit more workers for an industry that will continue to be part of the backbone of the American economy for decades to come,” said Biden.

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A deal had to be reached by midnight to avert a shutdown.

U.S. stock futures ES00, +0.16% NQ00, +0.10% didn’t react much to the news, with the S&P 500 contract steady in the early hours.

Railroads however gained ground: Union Pacific UNP, -3.69% rose 4% in premarket and Norfolk Southern NSC, -2.16% added 2%. CSX CSX, -1.05% rose 2.5%.

Without the deal that was reached among the 12 unions, a stoppage could have begun as early as Friday that could halt shipments of food and fuel at a cost of $2 billion a day.

Far more was at stake than sick leave and salary bumps for 115,000 unionized railroad workers. The ramifications could extend to control of Congress and to the shipping network that keeps factories rolling, stocks the shelves of stores and stitches the U.S. together as an economic power.

— The Associated Press contributed to this report.

This article was originally published by Marketwatch.com. Read the original article here.

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