What Will Happen if UPS Workers Strike?

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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. UPS has become evermore important to Americans and to the US economy since the start of the pandemic, and now there might be a UPS strike on August 1st. As of now, the Teamsters union is threatening to strike if an agreement is not reached by July 31st when their current contract expires. The Teamsters represent a lot of people in this workplace, 340,000 UPS employees including drivers and warehouse workers. If a strike does occur, it would be the first UPS strike since 1997 and the largest strike against a single employer in US history according to reporting on NPR.

Now, this comes amid a larger strike wave occurring in the United States as we've seen workers from various sectors, teachers, nurses, Hollywood writers and actors take to the picket lines over the last few years. Joining us now to discuss the details of the negotiations between the two sides and the potential impact of the UPS strike in the age of extreme dependence on shipping is Jane McAlevey, organizer, senior policy fellow at the University of California at Berkeley's Institute for Research on Labor and Employment, she's a columnist with The Nation and co-author of books including Rules to Win By: Power and Participation in Union Negotiations published this year, she was on the show for a book interview for that, and Jason Miller, associate professor of supply chain management and interim chair of the supply chain management department at Michigan State University. He'll talk about the possible impact. Jane and Jason, thanks for coming on WNYC today. Hi, there.

Jane McAlevey: Hi, there. Always good to be here.

Jason Miller: Yes, thanks for having us on.

Brian Lehrer: Jane, can you start by telling us basically what the pay and working conditions are like for UPS workers, why they're on the verge of a strike?

Jane McAlevey: Yes, absolutely. Despite record profits, both before and during the pandemic, if you factor in the cost of inflation over the last several years, what you've got is a huge gap between what the CEO and the executives are taking home, which was, by the way, 27.6 million is what the CEO took home last year. If you look at the central issues in this discussion, you've got workers making in the part-time category, which is sort of the unresolved, we might go through what was resolved before talks broke down on July 5th versus what was not yet resolved, but the key issue that's left on the table right now has a lot to do with part-timers, wages.

Part-timers' wages, because UPS is such a big federal contractor, actually track far too closely, if not right at a national standard set to be a federal contractor, and in a place like California, it's basically at the state minimum wage. You've got this incredibly successful company, 13.1 billion in profits in 2021, 13.9 billion in 2022, steady increasing profits since 2012, huge projections to be at 15 billion by profit in 2026, and frankly, they're paying part-time labor, who got us through the pandemic, functionally minimum wage in a lot of markets. That's at the heart of it along with the fact that they're back to having 60% of all employees, you mentioned 340,000 of people who literally got us through the pandemic, and you've got 60% of them working unsustainable part-time jobs.

That's the heart of the issue that's left on the table in the battle that I certainly am hoping the workers will win because it is in some ways, with this being the largest private sector unionized contract, they're going to be setting a pattern for many workers across the country, whether it's the big three auto workers, et cetera. What these workers fight for and when and what they're demanding is frankly a family-supporting wage. They need a family-supporting wage. Despite record profits, UPS is not willing to enlarge the pie and not willing to share enough with the most efficient workers in the entire delivery system.

Brian Lehrer: Now listeners, I wonder if any of you can help us report this story. Do we have any UPS drivers listening right now while on your delivery routes or in any other UPS job? Maybe you're in a warehouse right now listening to the show as you work, 212-433-WNYC. Maybe you're one of those part-timers that Jane was just describing UPS is relying on so, so much which, of course, I guess would allow them to save money on not just wages, but also benefits if they employ a big part-time workforce in lieu of full-timers to do a lot of the same work, 212-433-WNYC.

Any UPS employees want to call in, talk about your pay, your working conditions? Are you enthusiastic about the possibility of a strike if nothing changes enough in the contract negotiations? Nobody wants to strike, nobody's enthusiastic about striking, but are you enthusiastic about taking this action if necessary? 212-433-WNYC. For others, how would a UPS strike affect you or your business? 212-433-WNYC, 212-433-9692. As calls are coming in, Jason, let me turn to you and ask about how the COVID-19 pandemic changed demand for shipping and how much that has receded as the pandemic emergency has receded and people have gone back to shopping in person.

Jason Miller: When you look at it, there was a surge of e-commerce activity really in the second quarter of 2022. Peak activity in the industry that UPS is in, which is called Courier and Messengers, was really in 2021. Activity was about 25% above where it was before COVID, but it's very important to realize that there has been a substantial cooldown of activity, especially over the last year. The Census Bureau's data adjusted for inflation for that sector has shown activity falling about 12% from the peak levels that we saw in 2021. When you look at the Bureau of Labor Statistics, total hours worked for production and non-supervisory personnel in this industry, they're down about 8% to 11% from where they were in the peak.

Part of the reason for UPS's management, I think, having some concerns in terms of what they ultimately negotiate is we have a sector that is in a substantial recessionary cycle, and it really has been since the second quarter of 2022 with signs that were probably near the bottom in terms of volumes, but a steep decline. I think that we're having this negotiation taking place in a context of declining activity for UPS.

Brian Lehrer: What's management's position in a nutshell?

Jason Miller: My sense of management's position is as was mentioned, the real disagreement right now is over part-time wages. Management is saying that the pay average is $20 an hour, the Teamsters are saying it is not, and so that's where we're having, I'd say, the real disagreement at the present point in time.

Brian Lehrer: Before we take some phone calls, and TK in Rockland I see you, Antonio in Brooklyn, I see you, you'll be our first two calls, UPS workers, what share of all shipping does UPS do now, Jason, if you know, and what share of Amazon shipping in particular?

Jason Miller: Right now, we know, and these are estimates, that UPS represents about 25% of parcel activity in the United States. They haul about 25% of parcels. It is quite unclear what percentage of Amazon's freight that is. We know that UPS has said, this is from 2022, that Amazon represented about 11% of their revenue, but the expectation is that roughly potentially 30% to even 40% of UPS's parcels are from Amazon. Amazon is certainly a key customer for UPS.

Brian Lehrer: TK--

Jane McAlevey: Can I just-- go ahead.

Brian Lehrer: Go ahead, Jane. Go ahead.

Jane McAlevey: Yes, I just wanted to throw in there, I think looking at quarter by quarter is not a particularly useful way. I'm looking at a decade of data, I'm looking at Barclays' projections, I'm looking at SEC filings. This is a growth company in a growth sector. Of course, it's down from the peak of the pandemic, but it's not down over time. The profits going to the shareholders and the profits going to the executives make a mockery, frankly, of the kind of compensation that the workers have gotten. Finally, the employer is using a lot of threatening language around losing market share to FedEx primarily. The truth is by any standard, the UPS workers, the Teamster workforce is a far more efficient workforce than any of their competitors.

That, whether you read Barclay, who says, "We find UPS driver efficiency and facility throughput to be nearly 50% to 60% higher relative to consolidated FedEx operational and outcomes, or you look at any number of aggregate numbers." Yes, FedEx is the main competitor, but they are so inefficient and you can find data about it anywhere. The truth is, UPS, because it has a strong union contract because the employer could make predictions about what they're going to have to spend during the pandemic, it's just a better-run company. It's better run because it has a union contract, quite frankly, and more stable and better workforce.

They may lose market share for a nanosecond during the strike. That wouldn't be a good thing. They're not going to lose it overall. There's too much data out there from patient and patient, from consumer dissatisfaction about FedEx to just what the business world says about FedEx. They're inefficient frankly, and UPS because of the union contract is a far better-run company.

Brian Lehrer: TK in Rockland County, you're on WNYC. Jason, hold that thought. We'll get back to you for it. Let me get a couple of callers in here. TK, you're on WNYC. Hello.

TK: Whoa. Thank you, Brian. Let me tell you something, honey, how they got that satisfaction up so high. You go in that warehouse and you suck air, they crack that whip. You are not in the union for a while. They run through warehouse workers like you run through tissue at a funeral. You jump in and out that truck every minute, somebody standing at the end of the truck going, "Stop. Next truck." You stop what you're doing. You jump out the truck, literally jump into another truck. You might work that truck for 5, 10 minutes, loading up the back, somebody standing there, "Stop. Back to the other truck." You jump out that truck, jump back in the other truck.

Let me tell you something, there is nothing in this world like being treated like a mule. 2023 and they are treating human beings like mules. That's if you are in the union. If you are not in the union, it's even worse than that. We've been in this heat wave. I don't know what you think those temperatures are in that warehouse, but imagine what the temperature is in the warehouse in the truck with no AC and it goes on and on and on. While people sit at home and click the link and tap on their smartphone, there's people trying to earn a living that are damn near dying while some guy sits on his yacht. Thank you.

Brian Lehrer: Whoa. TK, what could they put in the-- Let me ask TK because having-- Oh, TK's gone, but he-

Jane McAlevey: I was just going to-- [crosstalk]

Brian Lehrer: -or has been a warehouse worker and wow, Jane.

Jane McAlevey: No, no. I couldn't agree with him more. By the way, one of the things they did resolve that the workers already achieved before the July 5th breakdown was air conditioning in every truck. There's been a huge victory on that, on the part of the workers already, and they got a ways to go in terms of victories and money that they deserve, but AC was one of the issues that they've already won on.

Brian Lehrer: Antonio in Brooklyn, you're on WNYC. Hi, Antonio.

Antonio: Hey, how are you? Thank you for having me. I love the show. First-time caller, longtime listener.

Brian Lehrer: So glad you're on.

Antonio: I've been a UPS driver for over 28 years. Just recently I started working as an organizer for the union, and all I can say is that some of the stuff you guys mentioned earlier, it is the largest collective bargaining agreement in North America. We do control 6% of the world's GDP and a thing that was being mentioned, especially by TK, the way the workers are being treated inside the facility. See, the UPS driver is the face of the company. That's the friendly driver who comes, delivers the packages. Everybody knows who they are. They make a fairly good living. It's still rough conditions, either way you look at it.

Then you have the inside warehouse worker that's almost like a second-rate citizen, just treated horribly. Thankfully, they do have a union, so they do have some protections, but at the end of the day, you're talking about what it takes a driver all day to delivering his truck anywhere from 3 to 400 pieces. It could be anywhere to 150 to 170 stops. A part-time worker will load four or five of those trucks within three and a half hours to four hours. Three to four to even five of those vehicles, some even six in a matter of three and a half hours loading essentially close to 1500 to 2000 pieces in that short span of time, dealing with these hot conditions like they mentioned earlier.

I started in 1994 as a young part-time package handler doing that kind of work. It was grueling even for me back then, and six years later I went full-time, but I was part of the '97 strike. The scary thing is that in '97, we were fighting for part-timers as well. The reason we went on strike in '97 was for the part-time workforce. Unfortunately, over time, they were able to just continue to degrade that position. Over years and years, at least 20 years since we haven't been on strike almost for 25 years, the part-timers just continue to be left behind. I have to give our leadership, Sean O'Brien, the president of our international union, a huge amount of credit for not selling out the part-timers this time around.

We're standing by our part-time workforce. They are, a lot of them, the backbone of this operation. They do an amazing essential amount of work. Let's face it, during the pandemic when people in their homes, people in-- it was the UPS workers who were out there delivering the goods while people were scared to come out of their homes. The company made almost $16 billion in profit. We're not talking about revenue here, we're talking about pure profit. Their CEO made with all her bonuses and all the shareholders and all that stuff, she made $27 million and they can't afford to pay our part-timers a bit more?

We're not asking for much, Brian. We're not asking for much. We're just asking to give what's due. These workers were called essential workers. They were called heroes during the pandemic. A lot of them risked their lives, their families' lives, and on top of that, many had passed away. Many didn't make it. People in their families didn't make it. Why? Because they were out there, they were on the front line and all we're asking for is what they deserve.

Brian Lehrer: Antonio, after the vivid and passionate description by TK about a warehouse worker's day and being used like a mule as he described it and you reinforcing that, is there something that you and the union would like to see in the contract regarding just the amount of pressure that's put on a warehouse worker from moment to moment?

Antonio: Yes, we would definitely like a production standard that's normal for people to stop putting profits over human beings and just realize-- Listen, because of the pandemic and everything that happened afterwards and Amazon and all these companies, e-commerce has grown exponentially. Everybody's ordering packages now. People that didn't order packages before because they used to like to go to stores and try on clothes, now they got used to clicking that button and get it. Just like TK said, they got used to using their smartphones to order things. Having it come right to your door. Those are the customers now that are the new customers that actually used to like to go to stores.

Now, because of that, the production standard is just insane, so they're trying to crack the whip, they're trying to force these workers to work hard and fast. We have a contract and in our contract, it states "a fair day's work for a fair day's pay". No more, no less. A lot of our workers when they-- Sorry.

Brian Lehrer: No, I just got to go because we're coming toward the end of the segment. I want to get one more thought from each of our guests, and I appreciate your call. Thank you for laying it out as clearly as you have. Jason, you were trying to get in a couple of minutes ago, I think after TK's call. You want to pick it up from there or say anything you want in response to those two callers?

Jason Miller: I more want to address the issue of UPS potentially losing volume if there's a prolonged strike. They will lose volume. The upper-end projections right now are up to 30% of volume getting diverted. I'm very embedded in the shipper community and the shippers have very little patience for things like this. There will be substantial diversion of volume. I'm not saying I disagree with what UPS's workers are fighting for. I completely support the right to unionize and the right to fight for better working conditions, but speaking from a supply chain standpoint and giving the perspective of the shipper community, they will start diverting volume. Unlike 1997, there are alternatives. It is not going to come back to that degree.

Brian Lehrer: When you say the shipper community, you're talking about the sellers like Amazon and other companies, and when you talk about diversion, you mean they're going to go to FedEx, they're going to go to the US Postal Service and not come back?

Jason Miller: Yes, we've seen the estimate from probably the biggest industry expert, Satish Jindel at ShipMatrix is 30%. My estimate is 20% of UPS's volumes could be handled by the capacity that exists right now. You've already seen Amazon very aggressively over the past several years move to reduce their volumes to UPS as they continue to expand their delivery service provider network. This will be more and more and more of a catalyst to do that and move those volumes away from UPS. It's a different world than back in 1997, and with excess capacity in this industry right now, with activity down, and we're very unlikely to see 2021 parcel volumes for a number of years.

It will be a time where shippers will shift volume away from UPS. I would disagree about this volume quickly returning. I do not see that happening in the event of a prolonged strike.

Brian Lehrer: All right. Well, the deadline is July, 31st. Want to give us a last word, Jane McAlevey?

Jane McAlevey: Yes, sure. In fairness, I think that's a bit of scaremongering. We've seen numbers that look more like 10% in the short term. Again, if you look at the overall extraordinary productivity produced by the UPS workers who frankly do deserve more dignity on the job, I don't think that that number is going to stick. The fundamental issue here is in this country, at a time of grotesque inequality, how is it that a corporation that has projections of $15 billion in profit by 2026 is not willing to share a greater percentage of that profit with the workers who are getting us through pandemics, floods, fire, climate change and more?

It is time for UPS to expand the pie, come back to the table, cough up the money they have to reward these workers more and that's the only way that UPS is going to avoid a strike. These workers deserve what they're asking for, it's reasonable. I think the whole American public is behind them, just like the writers and everybody else who's on strike.

Brian Lehrer: Quick follow-up, to Jason's point about the threat of shippers not coming back to UPS if there is a strike, do you think the company perceives it that way and that that gives the workers leverage?

Jane McAlevey: No. I think there is scaremongering, when I talk to the workers, there has been several rounds of scaremongering done by the employer-- attempts at it. The message that management is moving inside of the warehouses into the workers, and the workers are too smart for it. These are smart unionized workers, we heard them on the phone already. They know the drill, they know the deal, they know that they're most efficient. If you compare what the FedEx stock buybacks are, stock returns are, all of it, these are just two different companies.

Again, I think it's on the employer, quite frankly, as to whether or not there's going to be a strike. They got very close to settling on July 5th, and the employer walked away to test the resolve, I think, of these workers, and they have shown us through practice pickets all over the country that they are ready to go if UPS does not cough up more money for deserving part-timers.

Brian Lehrer: Jane McAlevey from UC Berkeley, from The Nation magazine and co-author of Rules to Win by: Power and Participation in Union Negotiations, and Jason Miller, professor of Supply Chain Management and Interim Chair of the Supply Chain Management Department at Michigan State University. Thank you so much, both of you, for joining us today.

Jane McAlevey: Thank you.

Jason Miller: Thanks for having us on.

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