UPS Pact—Is the Truth Being Cooked?

by Charles Walker

This article, and the ones that follow below, are from the Labor Tuesday web site for July 23–30, 2002. The articles have been edited for Labor Standard.

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

But did these 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 these two papers of the contract’s worth, as estimated by UPS workers in general, or by 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’s estimate of the details that have been revealed — although 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.

A Different Slant

If the papers had contacted TDU, as the press often does for “balance” in their Teamsters reports, they would have gotten a slant on things very different from 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…”

TDU Says “Mystery Math” Doesn’t Add Up

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 giving 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.

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 in billions of dollars of new labor costs for UPS, the pact “will be only slightly more inflationary than the contract that’s about to expire.” If so, no wonder 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).

$9 Billion?

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’s and 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 1997 contract, reached after the first national Teamsters strike against UPS in its 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% 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-Time Workers?

As readers might remember, the 1997 strike against UPS was largely about the situation of part-time workers, who were virtually stuck 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 actually 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 up of part-timers, what happens with the part-timers’ wages is a major issue for tens thousands of minority and female workers, who are a very large part of the part-time workforce.

“Employers Again Have Upper Hand”

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.”

Furthermore, says Business Week, 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.

No Mobilization of the Union Membership

Aside from the self-serving evaluations of the proposed deal, the question that still needs to be answered is this: 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 member’s dues by 25%, 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 a much improved deal for its worst-off members — the UPS part-timers — if it had seemed ready to hold the corporation’s feet to the fire.

A Specter at the Negotiations — Ron Carey

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 Times reporter 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.”