The good news for UPS shareholders is this summer’s recent blockbuster wage deal for delivery van drivers will cost less than the purported $30 billion figure the Teamsters union bragged about.
The bad news is it’s anyone’s guess how much less, as senior management is staying mum on the exact amount.
The package would see 340,000 full-time UPS delivery van drivers in the U.S. haul in at the end of the five-year deal $170,000 in total annual wages and benefits, including healthcare and pension. A record 86% of the rank-and-file UPS Teamsters voted late last month to approve the provisional deal negotiated on their behalf by the union.
“It’s not a $30 billion deal,” UPS chief executive Carol Tome told CNBC in an interview on Monday, refusing however to put a number on it herself.
She went on to call the 3.3% wage increase compounded annually “a deal we’ll take any every day”. Furthermore, management retained the ability to dispatch drivers during the weekend, “which is really important for our customers.”
In addition to UPS workers remaining the nation’s highest paid delivery drivers, the Teamsters union also won concessions that MLK Day would be treated as a full holiday and every vehicle comes equipped with air conditioning as the nation struggles through its hottest summer on record.
Whether added costs such as these from other negotiated benefits were included in its $30 billion estimate is unclear, and the union could not immediately be reached by Fortune for comment.
“Our math was certainly lower,” UPS finance chief Brian Newman told Reuters on Tuesday.
Interest in driving for UPS surges
Finding out the UPS delivery man may not be as blue collar as the aughties sitcom King of Queens suggests has had many people question their life choices. Jobs site Indeed reported a 50% surge in searches for “UPS” or “United Parcel Service” within a week of the new contract.
The deal is emblematic of Bidenomics, the White House’s economic agenda aimed at helping Main Street rather than Wall Street.
Whereas Donald Trump celebrated record stock market highs and the rise of a handful of trillion-dollar corporations as proof his administration’s signature tax cuts worked, Biden is rebuilding ties with blue-collar workers in an attempt to end an era of stagnating middle-class wages.
Emboldened by the “most pro-union president in U.S. history”, labor leaders like SAG-AFTRA’s Fran Drescher and the UAW’s Shawn Fain have either taken to the picket line already or plan to on behalf of their members.
For both UPS and the U.S. economy, however, the stakes were high. Averted at the last moment, a Teamsters strike threatened to be the “costliest in a century”, according to a widely-cited estimate from the Anderson Economic Group.
Financial publication Bloomberg called the UPS Teamsters deal a “testament to the newfound leverage of organized labor at a time when wage growth is outpacing inflation.”