UPS workers approve new labor contract with big raises

UPS workers ratified a massive five-year labor deal that includes big wage increases and other improvements to work rules and schedules, the International Brotherhood of Teamsters said Tuesday.

The deal passed with 86.3% of votes, the highest contract vote in the history of Teamsters at UPS, according to the union.

“Teamsters have set a new standard and raised the bar for pay, benefits and working conditions in the package delivery industry. This is the template for how workers should be paid and protected nationwide, and nonunion companies like Amazon better pay attention,” Teamsters General President Sean O’Brien said in a statement.

UPS and the Teamsters union, which represents about 340,000 workers at the delivery giant, reached a preliminary deal last month, narrowly averting a strike that could have rippled across the U.S. economy as the previous contract expiration on July 31 approached.

UPS moves $3.8 billion worth of goods a day, which is about 5% of the country’s gross domestic product, according to the U.S. Chamber of Commerce.

The parties had until July 31, when the previous labor contract was set to expire, to reach a deal and avoid a work stoppage. Workers began voting on the new contract Aug. 2. It’s the single-largest collective bargaining agreement reached in the private sector, according to the union.

Part-time workers will make no less than $21 an hour, up from a minimum of $15.50 currently, according to the union. Part-time pay was a sticking point during labor negotiations. Full-time workers will average $49 an hour. Current workers will get $2.75 more an hour this year and $7.50 an hour more over the five-year contract.

UPS drivers will average $170,000 in pay and benefits at the end of the five-year deal, said CEO Carol Tomé on an earnings call earlier this month.

The company cut its full-year revenue and margin forecasts, citing the “volume impact from labor negotiations and the costs associated with the tentative agreement.”

The union is the latest labor organization to push a major U.S. company for better pay, schedules and other work rules in the wake of the Covid-19 pandemic and decades-high inflation.

On Monday, American Airlines pilots ratified a four-year deal that includes roughly 46% increases in compensation, including 401(k) contributions, a deal the carrier sweetened after rival United Airlines reached a richer agreement with its pilots’ union. Delta Air Lines‘ pilots approved their deal, which includes more than 30% raises, earlier this year.

Southwest Airlines hasn’t yet gotten to a deal with its pilots’ union, which has laid the groundwork for a potential strike, though such stoppages in the airline industry are exceedingly rare under U.S. laws.

FedEx pilots turned down a tentative agreement for a new labor contract earlier this summer.