The Teamsters Union has declared that it has prevented what could have been one of the worst strikes in American history by securing a pay rise for United Parcel Service (UPS) workers.
Sean O’Brien, the General President of Teamsters, stated in a press release, “As a direct result of these negotiations, UPS has set aside a new sum of $30 billion on the table.” He further added, “This agreement establishes a new standard in the labor movement and raises the bar for all workers.”
Under the current five-year tentative agreement, the existing full and part-time UPS teamsters will earn an additional $2.75 per hour in 2023, with an increase of $7.50 per hour during the contract term. According to a statement by the Teamsters, the wages of current part-time employees will also be immediately increased to no less than $21 per hour.
The new part-time hires at UPS will start at $21 per hour, with increments up to $23 per hour.
The existing five-year collective bargaining agreement is set to expire on July 31. It covers nearly 340,000 UPS employees in North America. Local Teamsters chapters were preparing for a strike, staging practice picketing in recent weeks, in case the company and the union failed to reach a new deal by the end of the month.
The union members nationwide still need to ratify the new agreement in August.
The issue of part-time workers’ wages had been a point of contention between the two parties. At the start of July, the negotiations on the agreement were stalled, with the union arguing that the company could afford to increase wages for its part-time employees.
UPS had a record profit last year, reaching $100 billion in revenue for the first time in 2022.
On Tuesday, UPS CEO Carol Tome said in a statement, “Together, we arrived at a win-win settlement on issues important to Teamsters leadership, our employees, UPS, and our customers.” “This agreement maintains the necessary flexibility to remain competitive, serve our customers, and keep our business strong while rewarding UPS’s full- and part-time employees with industry-leading wages and benefits,” she stated.
The union had already won concessions on workplace safety.
According to the company’s filings, the average UPS employee made $52,000 last year. Tome earned 364 times that amount, with her pay reaching close to $19 million.
According to the corporation, after 30 days of employment, part-time unionized employees currently make an average of $20 per hour. The union, however, refutes these assertions.
The union had already achieved important successes during the contract negotiations, which had started in April, on matters pertaining to salaries and worker safety. Besides other concessions, UPS agreed to equip new delivery vehicles with air conditioning, eliminate forced overtime, and do away with a two-tier wage system for delivery drivers.
Until a few days before the possible strike for part-time workers’ wages and benefits, the matter remained unresolved.
The last nationwide UPS strike lasted for 15 days in 1997, costing the company over $850 million in losses. According to economic estimates, this year’s strike could have disrupted package delivery for millions of customers across the country, resulting in over $7 billion in economic losses.
FedEx, Amazon, and the US Postal Service, UPS’s primary rivals, would not have been able to handle the full backlog in the event of a UPS strike. In 2022, UPS distributed an average of 24.3 million packages each day.
A representative for the Teamsters said that UPS’s decision to start preparing its management staff to step in during the strike in July was an “insult” to unionized workers.
The threat of a UPS strike came amidst a wave of resignations by thousands of workers across all sectors from Hollywood to the hospitality industry in recent weeks, due to concerns about wages and working conditions.