Teamsters’ UPS win suggests more strikes coming

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Tuesday’s announcement that the International Brotherhood of Teamsters and UPS have agreed on a contract is a likely sign that strikes and other union actions threatening the current recovery will become more commonplace.

The Teamsters didn’t actually hit the picket lines this time but were nevertheless able to leverage a potential replay of the 2021 supply chain crisis to get what they wanted from the transportation company. Other unions will think, why not us? Hollywood writers and actors are already trying it in their sector.

“@Teamsters secured this TA through relentless organizing and a credible strike threat that woke @UPS UP!,” tweeted the AFL-CIO, the nation’s largest labor federation. “When we fight together, we make history together!” The Teamsters aren’t members of the AFL-CIO, but federation is cheering on their victory regardless.

The Teamsters were keen to strike. General President Sean O’Brien had urged his members to vote in favor of it. “This is how we win,” he told members.

O’Brien’s thinking was part of a broader belief in the labor movement that now is the time to get aggressive and to threaten to strike. A weakened, inflationary economy gives the threat that much more power. Tuesday’s announcement is being taken as proof. “We’ve changed the game,” the Teamsters announced.    

The Teamster-UPS deal announced Tuesday included raises of $2.75 more per hour in 2023 and $7.50 more per hour over the length of the contract, according to Reuters. All part-timers will be paid a minimum of $21 an hour. The average for full-time drivers, prior to today’s deal, was about $26 an hour, though it varied by region.

The company’s use of part-timers was a major issue. The Teamsters had sought to limit their use. Raising their pay so they become less economical for UPS to use them was the apparent compromise.

“This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive,” UPS CEO Carol Tomé said.

UPS was in a tough spot during the negotiations and decided that giving the union most of what it wanted was the least worst option. A 10-day strike would have cost the company $7 billion, according to a study by the Anderson Economic Group. It would have cost UPS’s customers a further $4 billion, creating further pressure to cut a deal.

The ripple effects of a strike throughout the rest of the economy could have been severe. UPS drivers transport an estimated 6% of the nation’s gross domestic product.