UPS Pact – Is the Truth Being Cooked?


From The New York Times of July 17, (“U.P.S. and Teamsters Reach Deal for a 25% Raise”) to the Peoples Weekly World of July 20, (“Teamsters win big at UPS”), comes word that the Teamsters’ tentative contract with United Parcel Service (UPS) announced on July 16 is a winner for the workers.

But did the usually differing papers contact all the relevant sources, or just rely on the press releases from the corporate and union negotiators? That question comes to mind, because there’s no mention in the two papers of the contract’s worth, as estimated by UPS workers in general or those UPS workers who belong to the Teamsters for a Democratic Union, a Teamsters caucus that at times has rallied UPS majorities against proposed national agreements.

Given time constraints, perhaps the two papers should be excused for not sending their journalists out to UPS hubs to get the ranks’ opinion. In any event the ranks won’t see the full agreement for weeks yet. And even then, they may not actually see the text that’s read to them at union meetings.

However, there’s no good journalistic excuse for not contacting TDU to get the caucus’ estimate of the details that have been revealed; though the public information, which is all the ranks know, doesn’t include the actual language that would be binding on the 230,000-strong sector of the UPS workforce that’s part of the Teamsters Union.

If the papers had contacted TDU, as the press often does for “balance” in their Teamsters reports, they would have gotten a far different slant on things than the angle provided by the corporation and the union.

UPS, reported The Times, “acknowledged that the contract might be generous, but said it was affordable and would help the company grow by assuring customers that there would be no work stoppage for at least six years.”

Not disagreeing, the Teamsters indicated that “the accord would be a model for millions of other union members.” Further they said (without contradiction from UPS) that “the pact would cost U.P.S. an additional $9 billion over six years.”

It was at that point that The Times might have “balanced” the official union/company view with TDU’s view that the scanty information released just didn’t add up, certainly not to $9 billion. Actually, TDU said that underlying the public reports was some “mystery math.”

Instead of TDU’s opinion, The Times quoted Harley Shaiken, “a labor expert at the University of California.” “This appears to be a very strong contract,” Shaiken said, “particularly with what else is happening in labor.”

Perhaps Shaiken will turn out to be right, but unless he has inside information that the ranks don’t have, his opinion seems no better than an “uneducated guess,” no doubt relying on the same Teamsters and UPS statements available to the press.

Is it really worth $9 billion?

In all fairness to The Times, the paper did quote a Wall Street analyst, whose take on the deal seemed to be that whatever the actual number of billions of new labor costs for UPS, the pact “will be only slightly more inflationary than their contract that’s about to expire.” If so, no wonder that UPS said that the tentative pact “enables UPS to remain strong in a very competitive industry, with the added stability of a six-year contract” (San Francisco Chronicle, July 17).

While there’s no debate that the contract is for an unprecedented six years, there is debate about the labor costs of the pact. Is it worth $9 billion, as repeated on July 17 by Greg Tarpinian, of the Labor Research Association, a public backer of Teamsters President James P. Hoffa? Tarpinian adds that the claimed new labor costs are “close to UPS’ total profits in the last five years.”

The problem with Tarpinian’s claim is that it’s not based on independent double-checking of the union and the company’s figures. We know that because the union and the company have yet to release the pact’s detailed language.

TDU says that the tentative agreement is not worth $9 billion, or double the gains in the 1977 contract, reached after the first national Teamsters strike against UPS in their 80-year history. The caucus says that after factoring in the extra contract year, the rate of inflation and the growth of the workforce by 25 percent the deal will cost UPS about “$4.7 billion, roughly half as much as Hoffa’s ‘Mystery Math’ figure.”

However, anyone who has ever negotiated a contract knows that costing out a contract is a tricky business. The variables can trip up projections, especially when economic conditions are likely to change noticeably over a six-year period. That’s just another reason for reporters and their papers, as well as academic experts, to dig into the actual language and numbers before rendering what should be an informed judgment.

What about part-timers?

As readers might remember, the 1997 strike against UPS was largely about the situation of part-time workers, virtually without much of a chance to get a full-time job, or reach the higher levels of the contract’s multi-tiered pay scale. The new pact, Hoffa says, closes the pay gap between part-time and full-time UPS workers.

But TDU says that’s not true. TDU says that UPS estimates that the present average wage of part-timers is $10, while the average pay of full-timers is about $23, a $13 dollar gap. TDU says the gap will grow to about $16.20 under the proposed pact. That’s because the part-timers average will only increase to about $11.20 in 2008, while the full-time rate will increase to $28.

Since the Teamsters share of the UPS workforce is in its majority made of part-timers, what happens with the part-timers’ wages is a major issue with the tens of thousands of minority and female workers who are a very large part of the part-time workforce.

TDU gets some support for its calculations from Business Week (July 17), which says that despite the new wage increases, “the high turnover rate of part-timers means that their average wage will still lag behind full-timers’ by the end of the contract.”

Further, says the journal, the “new six-year deal with the Teamsters shows that, in a stumbling economy, employers again have the upper hand.”

President Hoffa claims the tentative agreement is superior to the 1997 pact. Actually, he’s right and he’s wrong. For example, the 1997 strike forced UPS to agree to open up 10,000 full-time jobs for part-timers over a five-year period. Hoffa, too, got UPS to make the same concession, but spread over six-years.

Where Hoffa did make a breakthrough is getting UPS to end subcontracting-out of certain job categories (mostly clerical jobs, it’s reported). The result could add nearly ten thousand new members to the union. However, it’s not clear that the changeover would result in more full-time job openings for part-timers.

Aside from the self-serving evaluations of the proposed deal, the question that still needs to be answered is, given the relationship of forces, did either side leave anything on the table that it was big enough to carry away? Very often it takes a strike or a lockout to answer that question. This time, however, the answer may lie in the fact that unlike 1997, the Teamsters Union made no attempt to prepare and mobilize its members for a possible strike.

However, the union did raise members’ dues by 25 percent, partly justifying the increase by the need to build a strike fund. Still, it seems likely that the UPS negotiators took the lack of membership mobilization into account. Since UPS indicated that it feared a repeat of the 1997 strike, the union might well have gained its worst-off members-the UPS part-timers-a much-improved deal, if it seemed ready to hold the corporation’s feet to the fire.

There was a specter at the negotiating sessions, not seen of course, but palpably present. That specter was former Teamsters President Ron Carey, who was ousted from the Teamsters Union by government appointees in the wake of the widely lauded 1997 UPS strike.

The Times reported that Hoffa “boasted that he did better than Mr. Carey by persuading the company to let nearly 10,000 nonunion workers become Teamsters.” Hoffa’s boasting may have led The Timesreporter to conclude: “The negotiations also represented Hoffa’s biggest leadership test as he tried to win sizable concessions that topped the previous contract negotiated by his predecessor and bitter rival, Ron Carey.”

Related Articles

The International Food Crisis and Proposals To Overcome It

[Editor’s note: We reprint this article by the Committee for the Abolition of Illegitimate Debt (CADTM). In 1989, the Bastille Appeal was launched, inviting popular movements throughout the world to unite in demanding the immediate and unconditional cancellation of the debt of the so-called developing countries. This crushing debt, along with neo-liberal macro-economic reforms imposed on the global South, has led to an explosion of worldwide inequality, mass poverty, flagrant injustice and the destruction of the environment.

Summer Strike Wave Hits Britain

In Britain, the working class is experiencing a wave of strikes and “Industrial Action” from some of the largest established unions in the country, activity that disrupts the economy. These striking unions have made political demands in recent years to renationalize mail, rail and the electric grid.

Capitalism’s World Economic, Political and Social Crises and the Road to Fight Back

Led by the dominant capitalist-imperialist nations, especially the U.S. and China, the system involves the capture and transfer of surplus value from workers in poorer countries to leading corporations in the advanced countries. Today, global value chain corporations that represent only 15 percent of all trading firms worldwide, capture some 80 percent of total trade.