Every intense relationship has friction, and the one between the Teamsters union and United Parcel Service is no exception. Negotiations have broken down in the final stage of negotiations on a five-year contract, with the Teamsters vowing to strike if a new contract is not ratified by the time the current one expires on July 31. Each side accused the other of peddling. away from the bargaining table.
Behind the turmoil, however, the two sides have a long history of working together productively, recognizing that each needs the other. A third of a million Teamsters work for UPS, making the contract between them the largest of the nation between a company and a union. In most cases, and for the most part, their relationship was a role model for interactions between business and organized labor.
It’s also increasingly outlandish: As the chart shows, the rate of union membership in the private sector has fallen by nearly two-thirds since 1983. UPS is the only major package delivery company that is largely unionized.
A UPS strike would hurt the company, the union and customers. It could also give more business to UPS’s non-union competitors, which is in neither side’s interest. If a strike does occur, it will most likely be the result of misjudgments by management, labor, or both.
The Teamsters and UPS go back a long way. The International Brotherhood of Teamsters was formed through a merger in 1903. UPS was founded four years later by a couple of teenagers as the American Messenger Company. The Teamsters became for a time the nation’s largest private sector union, and UPS became the world’s largest package delivery company. There were ups and downs along the way. In 1967 the president of the Teamsters, Jimmy Hoffa, was sent to federal prison after being convicted of jury tampering, mail and wire fraud and conspiracy. In 1997 there was a 15-day strike that “largely crippled” UPS, as The Times reported at the time.
Today UPS is the largest employer of Teamsters, with a third of the union members. According to the company, full-time package truck drivers earn $42 an hour, on average, after four years on the job, and part-time employees earn $20 an hour, on average, after a month on the job. All employees represented by the Teamsters receive zero-premium health benefits and a pension plan.
To be clear: I’m not taking sides. It is impossible for outsiders to judge who is right and wrong in the current impasse over hourly wages and other monetary issues, as neither party has publicly revealed their bargaining positions. What we do know is that many contentious issues have already been resolved, including, as The Times reported, demand for air conditioning in new trucks starting in January and additional fans and ventilation for existing trucks. Last Saturday the Teamsters tweeted about three big victories: the elimination of a lower level of pay for some drivers, the establishment of Martin Luther King’s Birthday as a full holiday and the end of forced overtime on drivers’ days off.
Earlier in the negotiations the Teamsters put me in touch with a couple of UPS drivers so I could get a sense of the perspective of the rank and file. Jason Dube, a package truck driver from Poland, Maine, told me, “We work like hired mules,” and complained that “when some little red flag goes up, we’re treated like criminals.” He said he was ready to strike “to get some appreciation, respect.” On the positive side, he said he would much rather work for UPS than FedEx. (He said there are no Amazon drivers in his area.) “The safety, the training, the professionalism, everything we do is with purpose and thought. That’s why we’ve consistently been the best service provider in the industry .”
Steve Law of Watertown, Conn., said he grew so close to some of his customers as a package truck driver for 35 years that he attended a family wedding of one of them. But, he said, “some of the unrealistic expectations that management would put on me, that was the downfall of the job.” He added, “I see that happening to the younger people now, and it’s hard to watch.” He switched to being a car washer – an easier job – about four years ago.
The world is watching what happens at the UPS-Teamsters bargaining table because a strike would cause real problems. The company says it transports more than 3 percent of global gross domestic product and about 6 percent of USGDP every day. Other carriers might pick up some slack but not fully and not immediately. Americans have largely forgotten how disruptive strikes can be because they are so rare — no matter what you may have heard about a resurgence of labor activism in recent years. This chart tells the story.
FedEx sees the threat of a strike at UPS as an opportunity to gain new customers. “What I can tell you is that this has opened a lot of doors,” Brie Carere, the chief customer officer and executive vice president at FedEx, told analysts on an earnings call on June 20, according to a FactSet transcript. For Amazon, a strike would be a problem because it still depends on UPS to deliver some of its packages. (From mutual agreement(UPS is gradually handling fewer Amazon packages as it tries to shift to a higher-margin business.)
By earning solid profits with a largely unionized workforce, UPS has proven that opposing unions is not the only path to financial success. However, its two main competitors, FedEx and Amazon, have tried to remain almost entirely non-union. While UPS is governed by the National Labor Relations Act, FedEx’s overnight delivery business, FedEx Express, is covered by the Railroad Labor Act. That act, which was realized to discourage strikes and avoid interruptions to interstate commerce, sets a higher bar for organizing a union.
As for Amazon, the company has tried to discourage its workers from unionizing. Andy Jassy, the company’s chief executive, told CNBC last year that employees are better off not joining a union. In January, an administrative law judge ruled that an Amazon supervisor illegally threatened to withhold pay and benefit increases from employees at two warehouses in Staten Island if they voted to unionize. Amazon doesn’t hire unionized drivers because it doesn’t hire drivers at all: Those drivers you see wearing Amazon shirts and driving Amazon trucks? They are employed by subcontractors.
If UPS and the Teamsters can reach an amicable resolution of their differences, it will be good for them, their customers and the principle that strong unions make for a strong economy.
The Readers Write
You should know that Social Security is a pay-as-you-go system. The term “trust fund” has caused great confusion and political anxiety about the “fund” going bankrupt. The use of the term “bust” really makes my teeth itch. The political issue was, is and will be whether the US Treasury (and political establishment) ever breaks the promise of the “contract” between workers and retirees. I seriously doubt the federal government would actually cut the checks paid to beneficiaries.
What if we started charging Social Security taxes on every dollar earned? That seems like a start to me. Especially if we get realistic about income to include more than wages and salaries.
Your article on the removal of the Athelstan Spilhaus-designed Solar Triangle brought back a memory of meeting him in 1976. I was a graduating senior in landscape architecture at Texas A&M, and I attended a conference at which he was the featured speaker. . He totally encouraged our potential, nurtured our aspirations to make a difference. In an engineering and agricultural school like Texas A&M, his insistence on the creative abilities of the inventive technical mind was truly refreshing. I had the privilege of sitting at his table for lunch. He made an impression that your article reminded me of 47 years later.
Thomas M. Woodfin
College Station, Texas
Regarding your student loan forgiveness newsletter: When I did my master’s degree, I was one of two people in my program who worked. The rest of my classmates took out loans so they wouldn’t have to work. They partied every day and gave me grief for working instead of partying with them. Do I feel these students should have their loans forgiven? No!
Quote of the Day
“Violent shocks were of great importance in disrupting the established order, compressing the distribution of income and wealth, narrowing the gap between rich and poor.”
– Walter Scheidel, “The Great Leveler: Violence and the History of Inequality From the Stone Age to the Twenty-First Century” (2017)