UPS demands new levels and massive wage concessions in next Teamsters contract

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United Parcel Service delivery driver with cart of boxes Wednesday, June 21, 2023, in Denver. (AP Photo/David Zalubowski)

On Thursday, United Parcel Service (UPS) presented its economic proposal for its next contract of employment, demanding massive pay cuts and the addition of new levels for part-time and full-time workers. The logistics giant throws down the gauntlet to its 340,000 workers, who earlier this month voted to go on strike by 97%.

The proposal was so provocative that the International Brotherhood of Teamsters negotiating team, eager to save face and desperate to strike a deal by the July 31 deadline, launched a searing protest by “walking out” of negotiations. However, the union bureaucracy, which voluntarily signed a nondisclosure agreement at the start of the talks, never actually told the workers what the company had offered. Details were leaked online Friday morning.

New levels and reduction in real wages for part-time workers

About two-thirds of UPS’s workforce are part-time employees who work in company warehouses for as little as three hours a day. At the start of the current contract, which the Teamsters imposed in 2018 even after workers voted against it, those workers were earning $13 an hour, and that amount was gradually increased each year of the contract to its current rate of $15.50.

Adjusted for inflation, these workers earn less now than they did in 2018 ($15.50 today equals $12.85 in August 2018). The pay is so low that in many parts of the country, the company has unilaterally raised wages as part of “market rate adjustments” (MRAs) in order to attract enough workers.

The latest contract also introduced a hugely unpopular tier of lower-paid “hybrid” drivers – known as 22.4 after the relevant clause of the contract – who split their time between deliveries and working at UPS facilities. .

The new proposal would significantly expand the tier system. For part-time workers, the progression of wages would be linked to two categories of “old” workers, those who earn more and those who earn less than $20 an hour, and a third level of new workers hired after the start of the contract on August 1. the two “legacy” categories, general wage increases would be a pittance of 55 cents for the first three years of the contract, followed by 60 cents an hour in the last two years.

For those currently earning $20 an hour, this equates to just 14% wage increases over five years, or an average of about 2.8% per year, which means a substantial reduction in real wages being given that inflation remains above 4%.

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