The UPS Strike

The UPS Strike

E-mail debates of newsworthy topics.
Aug. 16 1997 3:30 AM

The UPS Strike

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Dear Walter:

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       What pay raise? UPS is cutting its wage level by half, as it goes majority part time ($20 an hour to $9 an hour). UPS was two-fifths part time in 1985, now it's three-fifths, and one day ... four-fifths? It's taking all the jobs that were golden apples and shrinking them into little crab apples.
       And you think wages are going up?
       To explain the shift to part time, UPS seems to take two different lines:
       1) "Oh well, what can you expect, people drop over exhausted after four hours of sorting, etc." The human body can't work physically at the rate UPS management wants.
       2) "Oh come on, we're letting the part timers work all the time they want." True enough: Over 10,000 part timers are working full time. Many economists point this out in defending the collapse of U.S. wages since 1979. "Sure we cut their wages in half ... but look at what we've done for people: We let them work twice as long!"
       What's remarkable about the United States is that family incomes have been stagnant as both Mom and Dad work longer hours. You can't drop UPS--or the U.S.--from $20 to $9 an hour, and then pat people on the head and say, "Isn't it wonderful? We're giving you a raise to $9.25!"
       That's why this strike is the most important of my life: It falls right on the San Andreas fault that so many people feel now under their feet. And that's why economists and others on the right are desperate to make people think the strike is really about something else.
       As to your claim on the Consumer Price Index, it's silly to inject that here. Many other economists, Stephen Roach at Morgan Stanley, for example, think that the index is seriously understated (especially with regard to housing).
       And is $20 an hour such wildly good pay? Maybe in the United States, but in Northern Europe and Japan a wage like this is more routine. I wouldn't gush over it.
       Just a word about the UPS demand to run the pension. I have represented groups of UPS workers in various cases over the years. I know most of them are frightened by the idea that UPS, "which can't get out paychecks right," is now going to run the pensions too. Indeed, UPS has run a plan for part timers--with no raise in eight years. (UPS wants to run health, so it can shove the workers into HMOs. You can imagine how the strikers feel about that!)
       But there's an even better reason why UPS workers want UPS in a multi-employer plan: to raise the level against which UPS has to bargain. Maybe in the short run, UPS could pay a "better" pension. But what happens in the long run if the "standard" industry pension drops? The UPS workers may keep doing "better than average" but the average just gets worse and worse.
       This is what workers in other countries, Asia, and Europe, instinctively understand. "I can't raise my benefit, unless in the long run I also raise yours." If in 20 years everyone else's pension drops, what kind of pension will UPSers get?
       You must know many of the adjuncts, part timers who now teach at the universities. ($3,000 a course? Or less?) Ask them what they think of the UPS strike.

Thomas Geoghegan

Thomas Geoghegan is a labor lawyer in Chicago. He is the author of Which Side Are You On? Trying to Be for Labor When It's Flat on Its Back. Walter Oi is the Elmer B. Milliman Professor of Economics at the University of Rochester.