During an earnings call this week, UPS CEO Carol Tomé revealed that UPS drivers will earn an estimated annual pay and benefits of $170,000 under a newly negotiated five-year contract agreement. This announcement marked the culmination of a lengthy negotiation process between UPS and the Teamsters Union, which successfully averted a strike and secured a new contract for the company’s 340,000 union employees. Tomé acknowledged that the negotiations were expected to be challenging and disruptive, leading UPS to adjust its full-year revenue forecasts to account for the impact of labor negotiations and associated costs.
The agreement, reached on July 25, will raise the compensation of full-time workers from approximately $145,000 to $170,000 over the course of five years. Part-time workers will also receive a salary increase, with their hourly pay rising to at least $25.75. Additionally, the new contract will end mandatory overtime for employees. According to UPS’ calculations, these changes will elevate the average annual pay for full-time drivers to around $102,000, based on a 40-hour workweek and 52 weeks per year. Drivers will also benefit from $50,000 in health, welfare, and pension contributions.
Following the announcement of the new pay agreement, online job searches containing keywords such as “UPS” or “United Parcel Service” surged by 50%, according to data from Indeed cited by Bloomberg News.
The pay increase for UPS drivers will position them in a higher income bracket, comparable to professions such as software developers, finance directors, and physician assistants, who typically earn average salaries ranging from $108,000 to $115,000, as reported by Indeed.
Tomé anticipates that the new labor contract will be ratified within two weeks, with voting concluding by August 22.
The agreement between UPS and the Teamsters is a significant milestone, representing the largest private-sector collective bargaining agreement in North America, according to a blog post by the union group. This development comes alongside other notable wage increases achieved by unions in the aviation industry and less than a year after union workers prevailed in a legal battle at Amazon’s Staten Island warehouse.
In conclusion, UPS drivers can look forward to a substantial boost in their earnings and improved working conditions thanks to the new contract agreement. This achievement signifies a landmark moment in labor negotiations and showcases the strength of unions in securing better terms for workers.
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