In a significant development, UPS has managed to avert its first strike in over 25 years, with the union representing its workforce announcing the approval of a new five-year
contract.
Months of negotiations between the two parties have concluded, addressing various demands including improved pay scales and enhanced working conditions.
Back in July, UPS disclosed that it had reached an agreement with the Teamsters Union to elevate the average annual salary of full-time drivers to approximately $170,000 (£133,440), including healthcare benefits and other perks. This marked an increase from around $145,000.
As part of the accord, employees will enjoy an additional paid holiday, elimination of compulsory overtime, and the introduction of air conditioning to the new models of the company's trucks starting next year.
Sean M O'Brien, the General President of Teamsters, emphasized the significance of this agreement, stating, "This is the template for how workers should be paid and protected nationwide, and non-union companies like Amazon better pay attention."
However, UPS cautioned earlier this month that its profits would be impacted due to this contract.
Headquartered in Atlanta, the firm stands as the largest package delivery company globally, with operations spanning over 220 countries and handling more than 20 million daily deliveries.
In 2020, UPS estimated that the value of goods it managed represented approximately 6% of the US economy, encompassing time-sensitive shipments for healthcare entities and other industries.
Workers in companies such as Amazon and other delivery enterprises have been taking inspiration from this agreement as they pursue their own wage increases.
The bargaining strength of unions representing "essential" transportation personnel like pilots, port workers, and delivery drivers has surged in recent months, buoyed by the nation's tight job market.
Recent data indicated a decline in US layoffs to an 11-month low in July, highlighting the resilience of the labor market in the face of the Federal Reserve's rigorous interest rate adjustments since March 2022.
Economists are closely observing the trajectory of wage hikes, with concerns that heightened wages could exacerbate the existing inflation issue stemming from pandemic-related supply disruptions.
While US inflation peaked at 9.1% last year, well beyond the central bank's 2% target, it has considerably eased as the impact of the Ukrainian conflict on food and energy prices waned.
In the present year, wage growth has begun to outpace inflation, potentially contributing to an increase in prices as consumer spending gains momentum. Photo by Teflon, Wikimedia commons.