UPS Is Flush With Cash. It’s Up to Workers to Demand the Company Cough It Up.

Micah Uetricht August 10, 2018

Even when they’re flush with cash, companies like UPS still attack workers’ standards. (Justin Sullivan/Getty Images)

The econ 101 expla­na­tion of how wages and ben­e­fits work goes some­thing like this: when times are tough and com­pa­nies are los­ing mon­ey, they have to lim­it work­ers’ com­pen­sa­tion and hire less. When they’re flush with cash, com­pa­nies bump up work­ers’ pay and hire more.

We should all be root­ing for high prof­its and bull mar­kets, since those are the con­di­tions that lead to the invis­i­ble hand deliv­er­ing bet­ter con­di­tions for work­ers. Yet for some rea­son, that hand is nowhere to be found at Unit­ed Par­cel Ser­vice (UPS).

Dave Jamieson has an excel­lent piece in the Huff­in­g­ton Post on the pro­posed new union con­tract for UPS dri­vers. The con­tract (which is at the ten­ta­tive agree­ment (TA) stage between UPS and the Team­sters, mean­ing that they are close to send­ing it to the union’s mem­ber­ship for approval), will cov­er more than a quar­ter mil­lion work­ers. It’s a mas­sive work­force for one of the most impor­tant logis­tics com­pa­nies in the Unit­ed States and the world, so what’s in the con­tract mat­ters a lot.

UPS isn’t hurt­ing right now. Quite the con­trary: the com­pa­ny has more pack­ages than it knows what to do with. Deliv­er­ies from e‑commerce sites like Ama­zon have all of the par­cel car­ri­ers oper­at­ing at full capac­i­ty. This huge new demand has been very good to UPS: the com­pa­ny pulled in $1.5 bil­lion in the sec­ond quar­ter alone.

You’d think, then, because UPS is mak­ing mon­ey hand over fist, the com­pa­ny wouldn’t be pri­or­i­tiz­ing under­cut­ting its work­ers’ wages and ben­e­fits. And it’s true, most UPS work­ers are being offered high­er wages in the TA. But some­thing else is afoot in the new contract.

In the TA — which the Team­sters’ lead­er­ship has agreed to — UPS intro­duces a kind of sec­ond-tier dri­ver posi­tion, a hybrid” dri­ver that would both deliv­er pack­ages in a truck and sort them at a hub. As Jamieson reports, quot­ing a dri­ver named Ken Smith:

The new employ­ees would work on a low­er pay scale than cur­rent full-time dri­vers, start­ing and top­ping out at low­er hourly rates. They also wouldn’t enjoy the same lim­its on forced over­time, open­ing them up to long work weeks. The way Smith sees it, those fac­tors would essen­tial­ly make the new dri­vers sec­ond-class with­in the union and poten­tial­ly dri­ve down the stan­dards for every­one over the long term.

Part of the company’s moti­va­tion in intro­duc­ing this hybrid posi­tion is that it wants to expand its deliv­ery ser­vice to sev­en days a week. Ama­zon is using oth­er deliv­ery ser­vices like FedEx and the Postal Ser­vice to deliv­er on Sun­days. UPS wants to get in on the Sun­day action, too. Fair enough.

But giv­en the num­bers the com­pa­ny is cur­rent­ly doing, and the clear demand for expand­ed ser­vice that is out there right now, you’d assume that UPS would be propos­ing a solu­tion that pays these new work­ers more. Nobody wants to work on Sun­days, and it’s obvi­ous the com­pa­ny is des­per­ate for more workers.

Yet as Jamieson reports, the pro­posed wage cap for stan­dard dri­vers in the new con­tract is $40; for hybrid drivers/​package han­dlers, by con­trast, it’s just over $34.

Of course, a big part of the company’s moti­va­tion is its com­pe­ti­tion like FedEx and Ama­zon con­trac­tors, who are eking by with far low­er com­pen­sa­tion. If the Team­sters were to orga­nize the oth­er par­cel deliv­ery work­forces — no easy task, giv­en the bla­tant abuse of mis­clas­si­fy­ing dri­vers as inde­pen­dent con­trac­tors” that com­pa­nies like FedEx have engaged in — it would give the UPS work­force some breath­ing room, as well as reverse mis­er­able con­di­tions at those oth­er companies.

But UPS is still doing quite well. Com­pa­ny bar­gain­ers aren’t propos­ing a two-tier con­tract because they have to. They’re propos­ing it because they can get away with it. Call it the Kanye West and Jay‑Z approachtowards shov­ing a shit­ty con­tract down work­ers’ throats: Who gon’ stop me, huh?”

The answer to that ques­tion is sup­posed to be the union.” Yet the Team­sters have signed on to the ten­ta­tive agree­ment. The reform group Team­sters for a Demo­c­ra­t­ic Union (TDU), on the oth­er hand, is call­ing for work­ers to vote no.” Team­sters Unit­ed, the slate that ran against Team­sters gen­er­al pres­i­dent James Hof­fa in the last elec­tion, is lead­ing dis­cus­sions around the coun­try about oppos­ing the contract.

The union recent­ly vot­ed to autho­rize a strike at UPS, with 93 per­cent of work­ers vot­ing in favor. The last time UPS work­ers went on strike, in 1997, it drew over­whelm­ing sup­port through­out the coun­try and held the promise of reviv­ing the Amer­i­can labor movement.

UPS’s actions here don’t quite square with how we’re taught labor mar­kets are sup­posed to work, but it’s pret­ty stan­dard stuff these days. Uni­ver­si­ty of Illi­nois labor rela­tions pro­fes­sor Robert Bruno not­ed a sim­i­lar phe­nom­e­non at the earth­mov­ing com­pa­ny Cater­pil­lar in Joli­et, Illi­nois, in 2012.

In forc­ing an end to a four-month strike at the com­pa­ny, Cater­pil­lar Inc. got what it want­ed. Not some of it or just what it need­ed, or what was eco­nom­i­cal­ly jus­ti­fied or even fair, but all of it.” Despite pre­vi­ous­ly agree­ing to a two-tier con­tract and the company’s sky-high prof­its, the union­ized work­ers got lit­tle more than the priv­i­lege to vote for their own abuse” by the end of the con­tract fight.

If they can get away with it, cor­po­ra­tions like Cater­pil­lar and UPS will always insist on erod­ing work­ers’ com­pen­sa­tion. This is how labor mar­kets work under cap­i­tal­ism. And right now, with the labor move­ment at its weak­est in a cen­tu­ry, com­pa­nies feel like they can get away with it.

If UPS work­ers — and every oth­er work­er in the glob­al econ­o­my — don’t want to see their stan­dard of liv­ing steadi­ly erod­ed, they’ll have to pry open the company’s grub­by hands and make them fork over the cash. The invis­i­ble hand of the mar­ket cer­tain­ly won’t be deliv­er­ing it to them.

This arti­cle was first post­ed by Jacobin.

Mic­ah Uet­richt is the deputy edi­tor of Jacobin mag­a­zine and host of its pod­cast The Vast Major­i­ty. He is a con­tribut­ing edi­tor and for­mer asso­ciate edi­tor at In These Times. He is the author of Strike for Amer­i­ca: Chica­go Teach­ers Against Aus­ter­i­ty (Ver­so 2014), coau­thor of Big­ger Than Bernie: How We Go From the Sanders Cam­paign to Demo­c­ra­t­ic Social­ism (Ver­so 2020), and is cur­rent­ly at work on a book on New Left­ists who indus­tri­al­ized.” He pre­vi­ous­ly worked as a labor orga­niz­er. Fol­low him on Twit­ter at @micahuetricht.

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