On July 5, Teamsters, a UPS workers’ union led by Sean O’Brien, made historic negotiations with UPS when the company pledged to install air conditioning in its trucks. However, negotiations met a screeching halt as the two parties walked out without a final agreement. The union is a record-breaking 340,000 members strong, and a recent poll asking members if they approved a strike scored a formidable 97%.
What makes these negotiations so crucial? Strikes and unions have their roots in labor reform movements of the late nineteenth and early twentieth century. In 1892, the Pullman strike brought about a nationwide boycott of all trains of the brand to support better wages. Much has changed since then, but the fundamental motives behind unsatisfied workers have remained the same: higher pay and better working conditions. The Teamsters have demanded more sensible starting wages, elimination of the two-tier wage system, and a fair contract. Like historic strikes and unions but on a greater scale, the current negotiations have the potential to rock the U.S. economy, 6% of which rests on trade brought about by UPS labor.
However, it is not the first time UPS workers have threatened to go on strike. In 1997, a UPS strike with 185,000 members effectively shut down UPS for 15 days, costing the company $850 million in profit.
Many businesses nationwide will feel the consequences of negotiation or lack thereof. The 1997 UPS workers’ strike showed how important it was for a business to diversify its carriers, as a devastating walkout could impose devastating catastrophic to the business. However, the 2023 union finds itself in an entirely different landscape. UPS only has around 50% of the total market share, as opposed to 75% three decades ago, and UPS technology and management have improved greatly over the years. However, if a strike lasts long enough to cripple the company, UPS would be forced to redraw its lines for negotiation.
The concerns of both the Teamsters and UPS reflect labor market issues in the U.S. economy today. The COVID-19 pandemic saw a drop in laborers, accompanied by a massive increase in the need for labor. The economy, which has spent decades capitalizing on automation to reduce manual labor, suddenly falls short on the laborers it so desperately needs. While UPS recorded its largest profits during the years of the pandemic, workers are less delighted, with many being unhappy about the lack of hazard pay or protection during a difficult period without vaccinations and treatments for the rapidly-spreading pandemic.
While the fallout of the Teamsters union this year may not be as devastating as the earlier one in 1997, the momentous decision to strike or not to strike could still affect our daily life and the entire U.S. economy. As for negotiations, the Teamsters and UPS still have time to discuss before their contract expires at the end of the month. As for companies who could get affected by uncertain UPS labor shortages, let’s hope they diversify their parcel carriers. As for the economy, we can only hope that the fallout will not be too large.
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