Unionized UPS workers have accepted a new five-year contract that the company’s CEO claims will see delivery drivers earning an average of $170,000 in annual pay and benefits by the end of the five years.
The Teamsters union, which represents about 340,000 UPS workers, voted by an overwhelming 86.3% to ratify the new contract, which will raise wages for full- and part-time UPS workers, create more full-time jobs and secure workplace protections, like air conditioning in the delivery trucks.
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“Our members just ratified the most lucrative agreement the Teamsters have ever negotiated at UPS. This contract will improve the lives of hundreds of thousands of workers,” said Teamsters General President Sean M. O’Brien in a media statement.
“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.”
Here’s what the landmark contract looks like — and what one UPS driver has to say about the CEO’s claim.
What’s in the contract
Under the new contract, existing full- and part-time UPS workers (in the Teamsters union) will get $2.75 more per hour in 2023 — and over the length of the contract, wage increases will total $7.50 per hour.
Existing part-timers will get an immediate pay bump to at least $21 per hour and wage increases for full-timers will keep UPS Teamsters the highest paid delivery drivers in the nation, improving their average top rate to $49 per hour.
The deal will also create 7,500 new full-time union jobs at UPS (NYSE:UPS) and the fulfillment of 22,500 open positions, giving more opportunities for part-timers to transition to full-time work.
“This is the richest national contract I’ve seen in my more than 40 years of representing Teamsters at UPS,” said Teamsters General Secretary-Treasurer Fred Zuckerman. “There are more gains in this contract than in any other UPS agreement and with no givebacks to the company.
“But the hard work doesn’t end here. We will continue to fight like hell to enforce this contract and make sure UPS lives up to every word of it over the next five years.”
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UPS driver sets the record straight
During a recent earnings call, UPS CEO Carol Tomé said the average full-time driver will earn around $170,000 annually in pay and benefits by the end of the five-year contract.
When the new contract was first proposed, some people balked over the suggested $170,000 annual pay — especially on social media.
TikTok user Skyler Lee Stutzman, who says he’s a driver for the parcel company, took to the video-sharing platform to set the record straight in a viral video that has been viewed over 17 million times.
Stutzman claims under the new deal his pay will increase to $44.26 an hour — which aligns with the $2.75 increase in 2023. He then multiplies that hourly rate by 2,080 hours (40 hours a week) to reach annual pay of about $92,000.
Using the same formula, working 40 hours a week at the new average top rate of $49/hour would pay just shy of $102,000 annually.
“But that’s not including overtime,” Stutzman pointed out. “It’s also not the important part we’re missing here.
“One of the other things that a lot of people don’t take into consideration is our medical insurance and our pension.”
According to Stutzman’s breakdown, average pension contributions would account for an additional $24,960 a year. For its part, UPS says it contributes more than $23,000 a year to each full-time employee’s pension plan.
As for medical insurance, Stutzman doesn’t give an estimate — but a survey commissioned by the Kaiser Family Foundation found the average annual premiums for employer-sponsored health insurance in 2022 were $7,911 for single coverage and $22,463 for family coverage.
“You can quickly see that it would actually take about a $170,000 a year job to replace this one for me,” Stutzman acknowledges, saying the company is “amazing” to work for.
In a later TikTok video that was also published before the contract was ratified, Stutzman makes the claim that although the Teamsters negotiated a “strong” contract, he believes if inflation continues at its current rate, the new deal “still is not keeping up with inflation.”
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