UPS and the Teamsters union, representing 340,000 delivery drivers, reached a crucial deal on Tuesday, avoiding a nationwide strike that could have significantly impacted the U.S. economy. The five-year tentative agreement includes $7.50 per hour pay increases for all UPS employees, including part-timers, along with eliminating a lower-paid worker class and installing air conditioning units in delivery vans.
Teamsters General President Sean M. O’Brien expressed satisfaction with the deal, stating that it sets a new standard in the labor movement and raises the bar for all workers. UPS CEO Carol Tomé also praised the agreement, calling it a “win-win-win,” as it rewards employees with industry-leading pay and benefits while maintaining the company’s competitiveness and customer service.
A strike at UPS would have had far-reaching implications, affecting the U.S. economy and the labor movement. With more companies and a larger portion of Americans relying on delivery infrastructure, the strike would have been the largest for a single employer in decades. The 1997 UPS strike resulted in permanent market share losses for the company and negative impacts on small and large businesses.
The heart of the dispute was centered around pay and benefits for part-time workers who load and sort packages in warehouses. The starting wage for part-timers was $16.20 an hour, which has not kept pace with inflation since their pay structure was separated from that of delivery drivers in the early 1980s. UPS argued that part-time employees make an average of $20 per hour after their first 30 days on the job and receive competitive health benefits and rare pensions for private-sector workers.
The consulting firm AEG estimated that a 10-day strike would have resulted in losses of over $810 million for UPS.
Now, UPS members can vote on ratifying the deal, a process expected to take about three weeks. If the deal is rejected, the union could still opt for a strike. The situation remains a developing story.