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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%.
Meanwhile, those currently earning less than $20 an hour would not be brought back to that level until 2025 and would only receive the final two 60-cent wage increases thereafter.
New hires after August 1 do not appear to be eligible for these general wage increases at all. Instead, the current salary grid, under which all part-time workers receive the same salary each year of the contract, is being replaced with a four-year salary progression, starting at $17 and ending at $21. With the exception of workers affected by MRAs, this means that new part-time workers’ starting wages will be frozen at $17 an hour for the duration of the contract, again leading to substantial wage erosion. by inflation.
In the paragraph dealing with wages for new part-time employees, the language of the previous contract committing the company to “(eliminate) the two (2) level progression existing in previous contracts” and establishing “a uniform hourly rate for part-time employees” has been crossed out.
This change to restore progression at the expense of general salary increases would save the company huge sums of money because the extremely high turnover rate means that most workers will never stay long enough to reach the rate. The highest. Workers often stay a year or two or even just a few months inside the warehouses due to poor working conditions and low wages and working hours. At the end of the contract, the vast majority of part-time workers will earn close to $17 per hour.
New tiers and lower top pay for full-time employees
A similar tiered scheme, dividing “old” workers from new hires, would also be imposed on full-time workers, with even smaller general wage increases of 50 to 55 cents a year. New hires working at UPS facilities would peak at $24 an hour after four years.
Under the proposal, class 22.4 would be eliminated and all current hybrid drivers would become regular-fee car drivers. However, progression for all new full-time drivers (as well as most other non-‘internal’ categories) would be capped at $32 per hour. This is even well below the current maximum rate for 22.4 drivers, effectively replacing them with an even lower paid third tier.
Gig work, six-day work weeks and reverse COLA
In fact, since only parts of the proposal have been leaked, the full language may also create an even lower fourth tier of drivers through the massive increase in personal vehicle drivers, a package-style delivery system Uber. While the PVD gig system is already in place under the current contract, there has been widespread speculation that UPS is pushing for a significant expansion.
Other terms of the leaked proposal amount to pure provocations. For example, the company would have the option of changing to a six-day work week with just 45 days’ notice. A note in square brackets suggests that a proposal for Seven the day work weeks is “coming soon”.
Cost of living adjustments (COLA) are limited to the last two years, unlike the current contract, which included the COLA every year. UPS even offers the option of “reverse” cost-of-living adjustments to reduce general salary increases if the inflation rate falls below zero! “This formula will similarly be applied in reverse to reduce the applicable general annual salary increase provided for in Articles 22 and 41 for any year in which the deflation of the index” reaches a defined threshold.
Build grassroots committees to fight the Teamsters-UPS conspiracy!
The proposal makes it clear that the logistics giant, which made record profits during the pandemic and recorded $100 billion in revenue for the first time in its history last year, is preparing a new offensive against workers. He does not even have the slightest intention of ceding anything to the workers.
But the “walkout” of the Teamsters bureaucracy is only for public consumption, to disguise the fact that it helps UPS enforce concessions. New General Chairman Sean O’Brien repeatedly pledged to hit UPS if a new deal wasn’t in place by the end of July, but the bureaucracy quickly broke its own pledges in an attempt to put an agreement in place before that date. Meanwhile, the union held a strike authorization vote this month in the most sloppy way possible to limit turnout and prevent the vote from becoming a focal point of opposition.
In the days leading up to the release of the company’s economic proposal, the Teamsters had signaled that they were close to an agreement, boasting that all “non-economic” issues had already been resolved. For weeks they claimed to have secured major gains in the dozens of regional add-on deals, while maintaining complete radio silence on all the details.
But it’s implausible to suggest that UPS had backed away from continued concessions to workers on “non-economic” issues and is now playing hard on wages. In reality, it’s far more likely that the bureaucracy had already made major concessions to the company and knew all along what UPS would demand in compensation.
What is happening in the Washington, DC boardroom is not “talking” in the sense of negotiations between two opposing parties. This is a conspiracy against workers involving the Teamsters bureaucracy, UPS management and the Biden administration. The White House has been heavily involved in the talks from the start, continuing to work closely with the Teamsters on the railroads last year when it bought Biden a crucial moment to ban a strike and impose a contract of clearance sale.
As it did in 2022 on the railroads and is trying to do now with West Coast dockworkers, the White House is seeking to enforce a de facto ban on strikes through the union bureaucracy. O’Brien’s “militant” and angry public rhetoric – like the “back in the fight” declarations of new United Auto Workers President Shawn Fain – aims to lull workers into a false sense of security, while the bureaucracy prepares even more brutal concessions than in previous contracts.
Although there is deep distrust among UPS rank-and-file workers of the Teamsters bureaucracy, that sentiment needs to find an independent and organized form. UPS workers must take matters into their own hands by forming rank-and-file committees, independent of the union bureaucracy, to organize a struggle against the corporate plot and launch a counter-offensive to win what the workers need.