The Spark

“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx

United States:
UPS Strike:
A Fight for "Good Jobs"

Aug 17, 1997

With United Parcel Service negotiators declaring that their July 30 offer was their "last, best and final offer," Ron Carey, Teamsters president, called on union members to strike UPS. On August 4, the Teamsters, who had already voted to authorize a strike by a 95-5 margin, came out with few exceptions. 185,000 workers are covered under the basic UPS contract with the International Brotherhood of Teamsters (IBT); several thousand other workers, from one of the two Chicago locals covered under a separate contract, joined the strike. The Independent Pilots Association announced its 2,000 members would respect the IBT's picket lines.

In the first two weeks of the strike, there were, of course, the traditional picket lines, the size of which varied a great deal. There were also a number of rallies at different sites around the country, including at UPS's Atlanta headquarters. On Sunday, August 10, Teamster militants went to ballparks around the country, passing out scorecards, trying to publicize issues of their strike. On August 16, Carey announced that the union was calling all workers to join a national day of action for Thursday, August 21 – a "Good Jobs Action Day" – with rallies scheduled for at least 30 cities. On the first two Fridays, teamsters brought family members out to the picket lines, creating a festive atmosphere. And people were happy to be striking. On Sunday August 17, there were loud rallies in a number of different cities.

When UPS began to step up its rhetoric in the second week of the strike, John Sweeney, head of the AFL-CIO, announced that other unions would contribute ten million dollars a week to the IBT to pay strike benefits until the strike was over. This translated to only $55 a week for each striking Teamster, but it nonetheless demonstrated from the beginning that other unions were ready to support this strike.

Part-Time Workers with Full-Time Needs

The main issue of the strike – the growing proportion of part-time, lower-paid workers in the work force – touches not only UPS workers, but workers in practically every industry across the whole country.

In the economy as a whole, almost 26 million U.S. workers were employed part-time in 1996, amounting to almost 19% of all workers. Three decades ago, less than 14% of all workers were part-time.

The increase in part-time work is greater than these figures make it appear. A relatively new phenomenon hides part-time participation: more and more workers hold two or more part-time jobs. If they work more than 30 hours a week between all their various jobs, they are considered full-time for the purpose of government statistics. While they may be full time in the government's eyes, they are not full-time as far as wage rates and benefits.

Not only are wages consistently lower among part-time workers – on average, less than 2/3 the hourly rate for full- timers – the difference in benefits is even greater. Today, only 19% of part-time workers have health insurance, while 74% of full-time workers do.

"Part-time" is nothing but a way of saying, "low pay!" It is one of those fictions the corporations have been using to hide the fact that they are dividing their workforces into a small core of relatively well-paid workers, and another, increasingly larger layer of workers who do similar work, but for lower wages and benefits. By 1994, according to the Labor Department, almost 1/3 of the workforce were what have been labelled "contingent" workers: that is, part-time, temporary, on call, and so-called "self-employed" independent contractors.This large number of "contingent" workers are no longer only or even essentially those people who want to be in the workforce only part-time or sporadically. The fact is, today, a much larger proportion of "contingent" workers are responsible for families.

At UPS, for example, 2/3 of part-time employees are married, and over 35% had at least one other dependent, according to a recent study done for the IBT.

They may have a part-time job, but they have to pay full-time rent. Their possibility to work may be "contingent" on some boss's whim, but their need to eat is not.

Two Tier Has Come Back to Haunt a Union which Initiated It

The IBT first agreed to let UPS hire part-time workers regularly for certain kinds of work in 1962, when Hoffa Senior was at the helm. For a number of years, this seemed to change very little for the regular work force at UPS. The company was growing, hiring many more full-timers. Part-timers who wanted found it relatively easy to move into full-time work. And the bulk of the part-timers were college students or others who wanted part-time work.

The big change in the weight of the part-timers in the UPS system started 15 years ago when the IBT agreed to let wages paid to part-timers be frozen, while full-time wages were increased. Part-time starting wage was then $8 an hour, with their average hourly wage less than $10. That left a gap of about $3.50 an hour between the average hourly wages of part-timers and full-timers.

With each new contract at UPS, part-time wages remained frozen, and thus the gap continued to widen. Today the average part-time wage is only half that of the average full-time wage.

That increasing gap could only serve as an invitation to UPS to hire more part-timers. It was an invitation UPS was only too ready to accept. By 1986, the proportion of part-timers had jumped to 42% of the UPS workforce; by 1991, part-timers had become the majority of the work force. At the time of the last contract in 1993, they were 54%. Today, they make up 60% of the UPS work force and two-thirds of all Teamsters working at UPS. In some key areas, their numbers are even higher: 70% in Chicago; 72% in Los Angeles and in Newark-Northern New Jersey. At UPS's main air hub in Louisville, they make up 94% of the work force.

UPS, taking over delivery service from the Post Office, from other delivery services and from air freight companies, has continued to expand its work force. But the bulk of that expansion in recent years has been in part-time work. In the four years since 1993, 83% of all new jobs at UPS were part-time.

Whatever chance part-timers might once have had to work their way into full-time has become practically nil. In the 4 years since the 1993 contract, only 13,000 part-timers have become full-time. During the same period of time, the number of part-time jobs grew by 38,500, reaching 148,000 total part-timers at UPS.

"Part-time" is a misnomer. Over 10,000 UPS "part-timers" work at least 35 hours a week; some, as many as 45 hours. In many other cases, the same worker holds two "part-time" jobs: working 4 hours in the morning at one job, then working 4 hours in the afternoon at a different job – different, but both at UPS. The only thing partial about these jobs are the wages and benefits which are paid. The company obviously benefits from the lower wages and reduced benefits it is able to pay an ever increasing part of its work force. But it also benefits from the ability to drive these workers. UPS, itself, effectively admitted this, when it justified part-time status for loaders and sorters saying that no one could do the work these categories do for more than four hours a day! One of the problems UPS workers complain about is the amount of weight they are expected to lift working alone. UPS unilaterally abrogated the previous limit of 70 pounds in 1994, after the last contract was signed. Currently, there is no official limit, other than the limit UPS puts on the packages it accepts to ship: 150 pounds. Acknowledging that "workers are different," UPS did say that any worker who feels uncomfortable with a load greater than 70 pounds may ask for help. BUT, until Teamsters organized a one-day protest strike, it didn't even concede that.

No wonder UPS has a rate of injury 250% higher than the industry average! The part-time workers who have been there less than a year account for a disparate number of these injuries.

The company says, nonetheless, that these are "good" jobs. And it's true, UPS part-time pays better than many other part- time jobs. But if these jobs are so "good," then why did UPS have such a stupendously high turn-over level? In 1996 alone, UPS hired 180,000 part-timers, but only 40,000 of them were still with UPS at the end of the year.

No, these are not "good" jobs. There are very few "good" jobs anymore for anyone.

UPS Says It Wants to Give Its Workers a Bigger Pension – Imagine That!

The other main issue raised in the early days of the strike was who would control the pension money UPS pays to cover its full time workers. Currently it pays its contributions into 31 "multi-employer" pension funds run jointly by IBT and employer representatives. What it demanded, instead, was to set up its own pension plan, which it would control unilaterally.

In the first week of the strike, UPS declared that if it controlled the money, it could boost benefits, on average, 50%. In the second week of the strike, UPS gave a more prudent estimate: it could give $3,000 a month to a full-time driver currently drawing a $2,500 pension from the Teamsters Central States Fund – IF all UPS pension money went into a UPS-only fund. A UPS spokesman declared: "UPS and all the other successful companies are paying for those that have gone bankrupt or merged or whatever. Our philosophy is UPS money for UPS employees."

And if you believe that – that a company which is still pushing to keep part-time wages frozen after 15 years would raise pensions when it had complete control of the money – why then, you're just plain hopeless!

Whether or not UPS contributes money for non-UPS workers, it certainly does contribute a great deal of money for its own workers who subsequently quit or are fired, without ever qualifying for a UPS pension. Where will this money go, if UPS controls the fund? UPS spokesmen forgot to explain. But The New York Times did report that "UPS executives acknowledge that if actuaries find that there are excess assets – more than are needed to finance the benefits – in the proposed single-company plan, the company would reduce its contributions."

UPS hoped that its designs on pension fund money would be obscured by the common perception of corruption that hangs over IBT. Obviously, those pension funds were raided – by IBT officials who, together with their Mafia cronies, looted these funds. But, of course, Teamsters officials and Mafia hoodlums weren't the only ones who so benefitted: so did representatives of the companies.

And while the company still seems to have designs on Teamster pension money, Carey, the current IBT president, was elected the first time in 1991, in part because of his campaign to root out this kind of corruption from the union. As almost every observer testifies, he and his slate have expended a lot of effort to do that.

In any case, the pension issue for the workers is whether or not they will ever get one. Employment in the trucking industry is not very secure. The industry as a whole is composed of a number of small companies, a good proportion of which go bankrupt or default on their pension obligations. Thus, multi-employer funds like the Teamsters funds offer more protection. Even big companies like UPS go under. And UPS workers move a lot. The fact that a worker's pension contributions continue to be paid into the same fund, even though he may work at three or four or ten different companies during his work career, can mean the difference between getting a full instead of a partial pension. It eliminates part of the pressure that many other workers face, trying to stay with one single employer for 30 years in order to qualify for a full pension.

"The Financial Staying Power of UPS Is Not an Issue"

Clearly, it was UPS that pushed the confrontation. It proposed to withdraw from the IBT pension funds. From the point that negotiations began months ago up to the contract expiration, UPS refused to budge off its position on part-timers.

Whatever may have motivated UPS's decision to push to this confrontation, it was not because IBT demands on the part-time issue were outrageous. The IBT demands were, in fact, very modest: essentially, it wanted 10,000 part-timers, less than 7% of UPS's 148,000 part-timers, converted to full-time over the next four years. And it was asking for a really minimal wage increase for part-timers – after 15 years of no increases. Of course, in a time period like this, even modest demands appear too much for companies grown used to ever improving profit pictures.

UPS certainly was not forced into this confrontation by a weak financial picture.

UPS is today the dominant carrier in the package delivery industry, replacing the Post Office, and it is by far the most profitable. Today it controls 80% of ground parcel shipping, and it has been pushing its way into the air freight business. In recent years, it has moved to establish itself as a power overseas. Over the last six years, its after-tax profits have steadily gone up, reaching 1.15 billion dollars last year, despite losing 201 million dollars overseas in an effort to expand its markets. Its 19% rate of profit was significantly higher than that of any other company in its industry. Altogether, over the past six years, it accumulated almost five and a half billion dollars in profit. No wonder Standard & Poors declared that the "financial staying power of UPS is not an issue." UPS currently has 500 million dollars in cash reserves, another 4.5 billion dollar unused credit line.

Of course, no matter how profitable, a big corporation like UPS is always looking for more.

It's possible that UPS thought it could take advantage of the obvious divisions inside the Teamsters Union. With Teamsters for a Democratic Union, a long-lived reform group in the union, behind him, Carey had been elected Teamster president in 1991, the first time the IBT chose its president by a direct vote of the membership. But he squeaked in with only 48% of the vote, because the so-called "Old Guard" couldn't come to an agreement over who should replace William McCarthy, the previous IBT president. Thus they split their vote between two candidates. In December 1996, Carey was reelected, defeating James Hoffa Junior who was put forward by all sections of the "Old Guard," which hoped to trade on his famous name to repair their fortunes. While Carey this time had an absolute majority, 52% to 48%, the vote was still close and the turn-out, although higher, was still a low 35%.

Carey had already taken on the "Old Guard" in his first term. A good many of the privileges they had grown used to were done away with. For example, Teamster officials had long piggybacked one office – to be more exact, the wages of one office – on top of those of another. One official might hold local union position, a position in the middle structures and one in the International structures, getting paid for all three at once. When Carey did away with some of these structures, he deprived many officials of the fat they had grown accustomed to. Understandably they were bitter – a bitterness which was obvious at the 1996 Teamster convention and in the election campaign.

UPS had good reason to think they might be able to trade on this situation. In 1994, when Carey called for a one- day walk-out protesting UPS's abrogation of the 70 pound weight limit, most of the locals headed by the "Old Guard" ordered their members NOT to strike, warning them the local wouldn't be able to get them back if they were fired.

So far, the Hoffa forces don't appear to be making open attacks on the strike. Nonetheless, there could be some hold back by Hoffa forces. The most noticeable sign of this came in Chicago, where there are two locals which had separate contracts. One of those locals joined the strike, the one headed by a supporter of Carey. The other local, headed by a Hoffa supporter, extended its own contract with UPS. So far, its members seem to be respecting Teamster picket lines, when they come across them, but when there are no lines at their installation, they have been working.

Finally, the company may have hoped to make use of Carey's own unclear status as president of the union. Carey was re-elected in December. But the government-appointed monitor who has been supervising the Teamsters' internal affairs as the result of government probes into union corruption, has not yet certified Carey's election.

Right after the election, the Hoffa forces filed a protest that someone working for Carey had tapped into Teamster funds to help pay for Carey's election campaign. The complaint involved activity very similar to activity carried on earlier by Hoffa forces. The complaint against Hoffa had been resolved very quickly by the same federal monitor, and Hoffa was allowed to continue his campaign.

Curiously, the complaint against the Carey camp is still hanging. As such, it gives the government a weapon with which to threaten Carey if the strike should go on very long. (It's certainly obvious Clinton would prefer not to use Taft-Hartley, given the problems such an action might raise for the Democrats with labor.)

"A Showdown with the Union"

Whatever its reasons, UPS acted, in the early days of the strike, like a company intent on pushing a confrontation to its limit.

Every time its spokespersons talked, they insisted that the union had already been given "our last, best and final offer." In other words, you can strike as long as you want, you won't get any more.

Company representatives continually demanded that Clinton use his powers under the Taft-Hartley act to force the strikers back to work.

One week after the strike began, UPS chairman James Kelley broke off negotiations, denouncing the Teamsters for being "unrealistic." He warned, "We're heading back to Atlanta to make the difficult decisions that we have to make going forward," implying that UPS might be forced to start hiring scabs.

Entering the second week of the strike, Kelley declared that if the strike went longer than two weeks, there would be 15,000 fewer jobs to come back to, permanently lost as the result of lost business.

After negotiations resumed, toward the end of the second week, Kelley more openly threatened to hire scabs. In a television interview, Kelley pronounced, "The last thing I want to do is hire replacement workers, but the longer this goes along, you have to explore all options."

The Wall Street Journal, in writing about this strike, reported that "people close to the UPS chief say he and the company's managers have been preparing to go to the mat for months." Further, that "top executives at UPS have increasingly felt that the company was approaching a showdown with the union....There is a general sentiment among the management committee to take a hard line."

Is this anything more than the posturing carried out by a corporation in the early days of a strike, in order to gain more leverage at the bargaining table? At this point, that's not clear.

This Strike Struck a Chord

In any case, whatever happens, the strike itself is an important one. The Teamsters have at least demonstrated a readiness to take on one of the major corporations in a nationwide strike. A strike like this has not been seen in this country for well over a decade.

From the beginning, the Teamsters tried to underline for their own members that they were making a fight that touched every worker in this country, in one way or another. carey, when interviewed on "Meet the Press" at the end of the second week, insisted that the strike was "about the future, not just the Teamsters' future, but about good, full-time jobs for all American working people."

Gauging by the response so far, this strike has struck a chord with other workers, to the consternation of UPS, of course, but also of other corporations, and certainly of Clinton.

Whatever happens in this strike, it has raised an issue which is important for the whole working class. If the Teamsters would win something in this strike, that could be important, well beyond the part-time workers who would be affected at UPS.

UPS, confronting the support which clearly exists in the rest of the working class for this strike, may decide to cede something relatively quickly. But if it doesn't, and if it digs in for a longer fight, then it's clear the UPS workers have some real advantages. For other parts of the working class have already followed this strike with sympathy. They undoubtedly are in favor of the financial support made by the AFL-CIO. But they could be brought to support this strike in more active ways – and not just to support it, but to join it.

Obviously, the issue of part-time, that is, badly paid work, could mobilize other workers to take on the bourgeoisie head on.

Up until now, the Teamsters, while asking for support, haven't gone further. But why not?

And if the Teamsters were to win their demands, which only very incompletely address the problems, why not ask other workers to capitalize on that victory, and take it further?

Yes, why not!