340,000 UPS Workers Could Strike on Aug. 1—Here’s Why

UPDATE: As of July 19, UPS has reached out to the International Brotherhood of Teamsters to resume negotiations.

Hundreds of thousands of UPS workers are slated to go on strike starting Aug. 1 if their union doesn’t come to a contract agreement with the company by the end of July.

Negotiations between the shipping and logistics company and The International Brotherhood of Teamsters, the union representing UPS workers, have been at a standstill for more than a week with a July 31 deadline looming. 

The Teamsters have been demanding an agreement that “guarantees better pay for all workers, eliminates a two-tier wage system, increases full-time jobs, resolves safety and health concerns, and provides stronger protections against managerial harassment.”

So far, the two sides have agreed on a number of items. 

Starting Jan. 1, 2024, all delivery vehicles purchased will be equipped with air conditioning. Currently, many workers toil away in extreme heat without access to A/C, and some have even fallen seriously ill or died as a result. 

The two sides have also agreed to end the two-tier wage system for drivers who work weekends and earn less money. Under the current contract, drivers are divided into two separate tiers: full-time, or regular package car drivers (RPCDs), and “22.4” hybrid drivers.

Workers in the RPCD tier work Monday through Friday and make roughly $42 in hourly wages, substantially more than those in the hybrid tier earn, even though they also work full-time—including weekends—and split their time between deliveries and working in company warehouses.

The Teamsters argued that UPS used this tiered system to get lower-paid, junior workers to agree to deliver packages on weekends, thus cutting delivery costs. These drivers, the union says, are doing the same work as the higher-paid drivers who work on weekdays, and should therefore receive the same pay and benefits. 

Starting Aug. 1 (or whenever the new contract ultimately goes into effect), these hybrid drivers will be considered RPCDs, moved to full seniority status, and will see their pay adjusted to an “appropriate RPCD rate,” though the specifics of what that rate will be remain unclear.

According to Teamsters for a Democratic Union, a nonprofit organization that focuses on reforming the union, two-tier wage systems open the door for employers to drive down union standards, put targets on the backs of older, higher-paid employees, undermine pensions and health benefits, create animosity among coworkers, and weaken the union as a whole.

The Teamsters and UPS have also agreed to establish Martin Luther King Jr. Day as a full holiday for the first time, and have agreed to end forced overtime on drivers’ days off. 

The union is still pushing to raise wages for part-time workers at UPS, however, who earn a minimum of only $16.20 per hour. 

“These part-timers are working at poverty wages,” Teamsters President Sean O’Brien said on Morning Edition. “They need to drive the starting wage rate up, reward the people that have been there a long time, and provide full-time opportunities for these folks.”

The company touts the fact that delivery drivers earn an average of $95,000 per year in wages, but Teamsters President Sean O’Brien has noted that the $95,000 figure only applies for drivers working 60 to 65 hours per week.

O’Brien has also argued that workers deserve a cut of the company’s record profits of $11.3 billion last year. Shipping technology company Pitney Bowes also found that UPS saw a 5.5% increase in revenue year-over-year in 2022. 

If the Fortune 500 company cannot reach a deal that satisfies the union’s requests, the cost to the wider economy could be significant.

According to an estimate from Michigan economic research firm, Anderson Economic Group, a 10-day UPS strike could be the “costliest in U.S. history” and cost the U.S. economy $7.1 billion. That figure includes more than $4.6 billion in losses to consumers and businesses that rely on UPS, more than a billion dollars in lost wages, and $800 million in company losses.

Competing delivery entities such as FedEx and the U.S. Postal Service could pick up some of the slack, but experts have said “logistics networks are too strained to fill many of the gaps that would be created by a UPS strike.” 

Although the Teamsters union has not commented directly on this latest study, they’ve said in the past that if a strike occurs, it’ll be the fault of the company for not agreeing to the union’s economic demands.

UPS workers voted 97% in favor of strike authorization in June, and as Aug. 1 approaches, both sides appear to be gearing up for workers to walk off the job. Last week, UPS said it will begin to train its nonunion workers in the U.S. to temporarily replace the striking workers, if needed—an act often known as “scabbing” and “strikebreaking.”

O’Brien, meanwhile, said Sunday during a webcast with union members that he’s asked the Biden administration not to intervene if workers end up going on strike. He’s specifically asked the White House not to force a contract on the union on several occasions.

“My neighborhood where I grew up in Boston, if two people had a disagreement and you had nothing to do with it – you just kept walking,” O’Brien said. “We don’t need anybody getting involved in this fight.”