Teamsters/UPS Tentative Agreement Reached… For now!

by Sebastian Ward, ICN Intern/Correspondent

Contract negotiations between the Teamsters, who represent the UPS workers, and the UPS executives have been progressing for months now. They successfully negotiated 95% of the contract, including key items such as air conditioning in trucks, pay raises for all workers, and provisions to close the pay gap between part-time and full-time workers. However, on July 5th, neither the bosses nor the workers were able to compromise on compensation issues, specifically related to pay and benefits for part-time workers, who make up half of the UPS work force.

Teamster President Sean O’Brien announced that the UPS workers would stop work and strike beginning August 1st if both sides could not reach an agreement. The teamsters, recognizing their immense leverage over UPS executives, expected the bosses to cave in the event of a national strike. Although UPS began training nonunion workers to be strikebreakers nearly a week after the strike vote was taken and the potential strike was announced, the company eventually reached a tentative agreement with the union negotiators on July 25th. The workers left victorious, allowing union leadership to cancel the August 1st strike. Although many of the contract details are not yet public, the union has announced that part and full time workers will see a salary increase of $15,000 a year over the length of the five year contract. In addition, starting pay for part-time workers will be immediately raised to $21, and increased to $23 over the course in contrast. Some UPS workers were only being paid $15.50 an hour under the terms of the previous contract. This will have a major impact for the employees of the 47 UPS stores across Connecticut.

Had the strike occurred, there would have been severe repercussions on both UPS and the US economy as a whole. UPS is responsible for the shipment of 25 million packages a day, a quarter of the total package volume in the US. Even a short strike would have completely halted the packaging and shipping industry. Other shipping companies and the US Postal Service could have picked up some of the slack during the strike, but they could not have handled anything close to the total excess packages if the UPS workers went on strike. This would have resulted in the company losing customers, as major shippers would have looked to competing services like FedEx for contracts so that business could continue without interruptions. The president of UPS rival ShipMatrix, Satish Jendel, estimated the UPS would have lost 30% of their normal business if a strike had occurred. It’s ironic that UPS would consider risking such consequences considering their boom in pandemic profits is now trailing off. UPS saw yearly earnings increases of 20% a year since the pandemic and made a record profit of $100 billion in 2022. Considering that profits are the unpaid labor of the working class, this haul represents an enormous robbery of the highly exploited, highly casualized UPS workers. However, the company is now anticipating lower revenue in 2023 and in future years. As a publicly traded company, the executives of UPS are legally obligated to minimize expenses like wages, despite their exponential increases in their profits these past three years.

The wealthy and ruling class with the most stake in the US economy also had legitimate reasons to be fearful of the potential UPS strike. There would have been significant impacts on US supply chains since 6% of the country’s GDP is transported by UPS. Some estimate that a 10-day strike would have cost businesses nearly $7 billion.

Considering that about 50% of the UPS workforce of nearly 340,000 is Black or Latinx, the results of the potential strike and the contract negotiations will have a huge impact on minority communities as a whole. According to Richard Hooker Jr, the first black man to lead a local union chapter (Philadelphia 623), the company has a history of being retaliatory towards its workers, especially black and brown ones. Just two years ago, UPS wrongly fired 10 black workers who refused to work excessive overtime. This lawsuit came after a 2019 racial harassment case against the company. Black working class communities have a lot at stake while the labor movement is in an upswing, so it is crucial that these communities are organized and prepared to fight.

Strikes are the most powerful tool in the working class’ arsenal. UPS workers have not gone on strike since 1997, which was an enormous success for the Teamsters. Ron Carey, a former UPS worker, was elected to be the Teamster president, and he mobilized the rank and file into a militant strike. This strike was able to wrench $1 billion from the UPS bosses over the course of a 5-year contract

It is crucial to learn from and apply the lessons from 1997 to the circumstances which exist today. Although the Teamsters have made important gains for the UPS workers with this tentative contract, history shows that significantly more can be won.

This tentative agreement has been approved by the union leadership, but it has not been ratified by all sections of the rank and file, meaning the potential strike can still happen. For example, 57% of the UPS pilots voted ‘no’ on the tentative agreement, despite labor laws restricting them from striking. It is important to note that UPS executives were ready to fold to many union demands before a strike even started, most likely out of recognition that the costs for them would be too high. This illustrates how powerful even the threat of a strike is. As the labor market is still relatively tight, workers have enormous leverage to demand more from the company, who have been seeing record profits year after year. A militant strike with all the Teamster workers mobilized could have led to a smashing victory for the labor movement. A fight and a victory on the scale could have helped workers begin to claw back some of the trillions taken from them during the pandemic and inspired workers in other industries to organize and fight as well. Only a unified fight led by an uncompromising leadership can successfully leverage the power of the workers to dismantle the system which oppresses them.