UPDATE: After we posted our original article on this subject, the union and UPS reached a tentative deal on July 25. More details are at the bottom of the page.
The Teamsters threatened a conflict-filled summer, and so far, they are delivering.
Over the past month, the union authorized strikes at TForce Freight, Yellow, and UPS. For the former two companies, strikes have been averted in different ways. TForce and the union reached a new 5-year contract, and Yellow pledged to pay an overdue $50 million payment to cover workers’ health and pension benefits.
For UPS, negotiations remain unresolved, with conflict running high on both sides. The stakes are huge, too, not only for UPS but for consumers and the economy.
The breakdown: Talks between the Teamsters and UPS began in April and reached a standstill on July 5, with both sides pointing fingers at the other. The union vowed to strike on Aug. 1 if a deal isn’t reached, and the two sides will resume talks on July 25.
The fallout: A strike by 340,000 Teamsters members would cause substantial financial strife for the company, which suffered a $600 million loss during the 15-day 1997 strike.
Fast forward to 2023, and UPS handles 6-7% of the daily U.S. GDP, which is at least 24 million packages daily. No competitor is capable of absorbing that load.
Teamsters President Sean O’Brien darn well knows this, and he believes that a UPS strike could tip the U.S. economy into recession. This past weekend, Mr. Militant further declared, “[N]ow it’s time to pulverize.”
According to O’Brien, “95% of the contract” has been settled. This includes agreement on 55+ non-economic details such as mandatory overtime, worker holidays, and the elimination of two-tier wages. UPS detailed plans for improved truck cooling systems.
A crucial sticking point: Money, of course. The union demands a $25 per hour minimum wage for part-timers, who currently begin at $16.20 per hour but average around $20, which O’Brien labels as “part-time poverty.”
Butt out, Biden: The Teamsters claim to have straight-up asked President Biden “on numerous occasions” to keep his nose out of UPS bargaining and not intervene. That shouldn’t be too surprising, considering Biden’s role in averting a nationwide railway strike by forcing a deal that was opposed by unions and didn’t satisfy a core demand of workers, who walked away without sick pay.
What of non-union UPS Workers? In the event of a strike, 160,000 non-union workers of UPS will unavoidably pick up overtime shifts. UPS reportedly beefed up the training for these workers, who can only fill part of the service gap.
On the horizon: Amazon isn’t expected to be severely affected by a UPS strike since the online retailer delivers at least 2/3 of its own daily haul. Still, O’Brien warns that the Teamsters will soon intensify their attempts to unionize the online mega-retailer.
The Teamsters also want the eventual UPS outcome to influence the Big Three renewal negotiations that began on July 14. It’s no wonder, then, that UAW President Shawn Fain recently swooped into a Teamsters rally. The back-scratching has begun.
UPDATE: On July 25th, the Teamsters and UPS reached a tentative deal to avoid a strike. O’Brien was quick to claim victory by cheering that UPS will pony up “$30 billion in new money” for the new agreement, which O’Brien argues has “changed the game” for the entire labor movement.
The details, however, might tell a different story, and the true cost of the agreement won’t be reported by UPS until August 8 when the company reveals its second-quarter earnings. Here are details unveiled thus far:
- UPS committed to adding 30,000 union jobs in the next five years. That will include 7,500 full-timers, yes, but consider that UPS has already reportedly added 100,000 union jobs over the past five years, which is a 7% increase as opposed to the 2% coming for the new contract. So, it’s not exactly something to brag about, but that’s nonetheless what O’Brien is doing, no doubt to pump up union PR for other upcoming battles.
- The union claims wage boosts of up to $49 per hour for top full-time drivers and increases from $15 to $21 per hour for new part-time drivers. Notably, however, those wage boosts for full-timers will be spread over five years, and this might not be as good of a deal as the Teamsters claim. In other words, these might only be raises that will end up covering inflation, but again, we’ll have to wait until the final numbers roll out before all is clear.
- The tentative contract appears to stipulate that a key demand – air-conditioning in vehicles – will only be met for vans and package cars that will be “purchased after Jan. 1, 2024.” The older vehicles, which seem to remain the vast majority of them, will only receive “two fans and air induction vents in the cargo compartments.”
Will this tentative deal be ratified by a Teamsters vote, considering that the details could very well disappoint union members? Stay tuned.
