Major company threatened with labor strike that could disrupt the entire US economy

Major company threatened with labor strike that could disrupt the entire US economy
Workers sort packages at a UPS facility in Hodgkins, Illinois. The company is could be headed for a massive labor union strike at the end of July if a new deal is not reached. (Scott Olson/Getty Images)

UPS may soon be hit by the largest labor strike in recent U.S. history, large enough to visibly disrupt the U.S. economy

What are the details?

The International Brotherhood of Teamsters announced Tuesday that 93 percent of its UPS members and 91 percent of its UPS Freight members had voted to authorize a strike if negotiations with the United Parcel Service were not resolved. The union did not say how many members were part of the vote. The vote took place by secret electronic ballot.

Union members had to vote by 8 p.m. ET on Sunday. If a deal isn’t reached, the current contract will expire July 31.

The last UPS strike was in 1997 and lasted for 16 days. UPS reportedly lost more than $600 million in business as a result of that strike.

“This vote by our UPS and UPS Freight members gives the negotiating committees bargaining leverage this week and during subsequent negotiations for the national contract and the supplements,” Denis Taylor, director of the Teamsters Package Division and co-chairman of the Teamsters National UPS Negotiating Committee said in a statement.

What are they arguing about?

The company and the union are debating a wide variety of issues, including wages, benefits, improved working conditions, and subcontracting deals.

One of the issues on the table is a potential two-tier wage system. Currently, full-time drivers make an average of $36 an hour (about $75,000 a year). Under the new plan, the company would be able to hire part-time workers who are currently making $15 an hour, and upgrade them to full-time while keeping them at the same pay rate.

The Teamsters union is reportedly divided on whether or not to approve this. A faction within the union argued that the company should continue to pay new workers at the higher rate.

Is a strike definite?

Not yet. But now the union is authorized to start one if they aren’t happy with how negotiations have gone by the end of July. While it’s not uncommon for union members to approve a potential strike, leading to better negotiating power for the union, the disagreement within the union itself about the two-tier pay system could stall negotiations past the deadline.

How would this affect the country?

UPS employs 260,000 union members. According to CNN, UPS transports add up to around 6 percent of the entire U.S. GDP. This means that a strike like this one could have huge implications, not just for the company and its workers, but for the entire U.S. economy.

The largest labor strike in history was the Steel Strike of 1959, which involved 500,000 workers.