On June 16, the leadership of the International Brotherhood of Teamsters will report the results of its authorization vote to strike against the United Parcel Service (UPS). This is a vote of the union's membership that allows the union's leaders to commence a strike, but does not require them to call a strike. Because that date is drawing closer, several journalists have reached out to me to ask for my assessment of whether there will be a strike and, if there is, what economic consequences will result. I thought it might be easier for you if I simply provided six brief observations about the negotiations and potential strike here.
- The Teamsters membership will overwhelmingly authorize a strike, but that doesn’t mean there will be a strike.
Like lawyers questioning witnesses, union leaders usually do not ask their members questions to which the leaders don’t already know the answer. There are exceptions. For example, union members have said “no” when asked to approve tentative contracts even though their union bargaining committees thought they would say “yes.” Yet, President Sean O’Brien campaigned for his office with promises of tougher bargaining positions and a willingness to strike UPS. He won by a 2-to-1 margin. That margin suggests Teamsters are ready to take a tough line in negotiations.
Authorizing a strike is not the same as striking. Strike authorization votes are common union bargaining tactics. They show management the union’s members strongly support the union’s bargaining positions. SAG-AFTRA’s members just sent that signal as their negotiations began. But don’t overread this qualification: Teamsters are not just voting to authorize a strike. They are preparing for a strike. This is not a ploy. Nonetheless, a strike is not inevitable.
- If the Teamsters strike, it may be the largest private-sector strike since the last UPS strike in 1997.
I worked for Secretary of Labor Alexis Herman when she mediated the 1997 Teamsters-UPS negotiations. Her mediation efforts eventually succeeded, but the Teamsters engaged in a strike that lasted 15 days. The Teamsters’ UPS membership is approximately 330,000 --- probably the largest private-sector bargaining unit in the United States. If they were to strike for 15 days in 2023, the result would be 4,950,000 total strike days --- that is, almost 5 million days that workers are off the job because they are on strike. That’s more strikers and more strike days than the Cornell ILR Labor Action Tracker counted in all of 2022. It’s not gigantic by historical measures. Strike activity was more extensive and the number of strikers and strike days more numerous in the 1970s. Regardless, a Teamsters strike against UPS would be huge by any reasonable measure.
- A strike at UPS would be economically important, but not as threatening as others, like the freight rail and West Coast ports negotiations.
A Teamsters strike against UPS would have negative effects on the economy. UPS is the world’s largest parcel delivery firm. Its market share was slightly north of 30% in 2022. Most e-commerce companies heavily depend on it, including Amazon, which is also a competitor. A UPS strike will slow the purchase of consumer goods and some business-to-business sales. Some buyers likely will delay their discretionary orders until the strike is over. That’s important, but nothing like the risks presented by a potential freight rail strike in 2022. We have only one freight rail system in the U.S. We have only one system of ports on the West Coast, where negotiations between the ILWU and the PMA continue. Some goods entering the U.S. from Asia and the Pacific Islands could be shipped through Gulf Coast and East Coast ports, but more slowly and at greater cost.
We have only one freight rail system in the U.S. We have only one system of ports on the West Coast, where negotiations between the ILWU and the PMA continue.
By contrast, UPS has direct competitors, like the U.S. Postal Service, FedEx, Amazon, and others. Some share of the goods that might have been shipped through UPS’s system can be shipped by those competitors. It is important to note, however, that those competitors do not have endless capacity to expand. They will not want to make major investments in additional trucks, planes, and warehouse capacity, especially if a UPS strike will be short. They have warned they cannot pick up all the slack should there be a strike. So, the bottom line is some sizable number of goods purchases will be delayed, shipping prices likely will rise, and the economy might experience a small, fleeting amount of upward pressure on inflation.
- The Teamsters working at UPS have legitimate, sizable issues with management that echo in other industries.
During the COVID-19 pandemic, consumers shifted their spending from services (e.g., a night out with the family, vacations) to consumer goods. Most of those goods were bought online and shipped to Americans’ homes, including through UPS. Like many essential workers, UPS Teamsters exposed themselves to a deadly virus while their employer reaped record profits. The Teamsters and other unions representing essential workers want their members to share in those bloated profits with robust pay and benefits increases. The Teamsters also want an end to forced overtime, an increase in the number of full-time positions, and elimination of a hated two-tier pay system. New UAW President Shawn Fain likely will make a similar demand in his negotiations with the “big three” U.S. automakers as part of a larger effort in the labor movement to reverse years of concessionary bargaining.
One Teamster demand is especially important and relevant to other workers: better protections from hot weather. As climate change drives temperatures up, UPS drivers and others who must work outdoors or in large un-air-conditioned facilities like warehouses are at increasing risk of heat-driven illness and injury. The U.S. Department of Labor’s Occupational Safety and Health Administration announced two years ago that it is working on a new standard (i.e., regulation) to direct employers to protect workers from heat hazards. In the meantime, the Teamsters’ efforts to force UPS to address their heat-hazard issues could be instructive for millions of other workers.
- The Teamsters are almost certainly considering how their prospective contract with UPS could affect future organizing.
It is not a secret that the Teamsters want to organize Amazon’s employees. President O’Brien said as much. He launched an Amazon division of his union in September 2022. Teamsters Local 396 organized and negotiated an agreement for drivers working for an Amazon contractor earlier this year. As I explained in an earlier post, bargaining successes can help fuel organizing successes. While these UPS negotiations are not about anything other than the Teamsters winning a paradigm-shifting victory for its largest group of members and improving their lives, I suspect President O’Brien and his leadership team have Amazon’s 1.1 million employees well within their peripheral vision. They should. A great contract for UPS drivers and warehouse workers will help Amazon’s drivers and warehouse workers to better understand what is possible, if they organize.
- Will there be a strike?
No one who isn’t a party to the bargaining and/or talking with the Teamsters’ membership and the UPS board can say for sure. Nonetheless, it is meaningful that we are not seeing a lot of chest-beating in public or leaks to reporters suggesting that the negotiations are headed toward an impasse. To the contrary, news has been released that the two sides reached agreement on several challenging issues, including the uses of technology and reducing the number of packages that can be shipped through the U.S. Postal Service. In addition, UPS has aggressively downplayed any suggestion that a strike is coming. It’s latest negotiations update proclaims, “[w]e are aligned with the Teamsters on the importance of heat safety – we all want UPSers to stay safe when it’s hot.” It also minimizes the strike authorization vote as little more than “a routine part of the bargaining process.”
But it is important to watch President O’Brien closely. He has continued his tough talk about a strike and taking a “militant” position in negotiations.
But it is important to watch President O’Brien closely. He has continued his tough talk about a strike and taking a “militant” position in negotiations. Of course, he is trying to maintain as much bargain power as he can and a genuine strike threat can be an effective tool. The last strike cost UPS plenty. We should also take his statements at face value because his members almost certainly are. These negotiations are important to UPS Teamsters’ lives. We can assume they are watching closely. President O’Brien and his negotiators have to balance their own views of a good contract with their members’ expectations. They have to assess what is possible at the bargaining table and, perhaps, the picket line. From the outside, it’s hard to know how the Teamsters leadership will strike that balance because we don’t know what they do.
