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350,000 UPS Drivers and Package Sorters are represented by the International Brotherhood of Teamsters (IBT). Beginning in April 2023, IBT and UPS executives started the process of collective bargaining on several employment contracts. Those contracts included safety concerns such as air conditioning in the vehicles. Some contracts were geared toward pay increases; others addressed insurance benefits and recognized holidays. They argued their pay was much the same as that of a Walmart greeter, and the employees made huge sacrifices during the pandemic to keep the company running and now wanted reparations. Carol Duval, the CEO of UPS, was placed in a challenging position. If agreements could not be reached by the deadline of July 31st, 2023, workers would go on strike. According to CBS News, the strike would have been the biggest US strike in 60 years (Ivanova, 2023).

The CEO and the workers aim to reach agreements that benefit both parties and the organization. One theory Carol Duval would employ during negotiations is the expectancy theory. Expectancy theory holds that people are motivated to behave in ways that produce desired combinations of expected outcomes. (Kinicki, 2021). The CEO should understand and consider the motivations and expectations of both management and union members during negotiations. By aligning incentives and addressing concerns, they can influence positive outcomes.

The IB-T claimed the UPS workers were not earning a living wage. The World Population Review defines living or livable wage as the income required to cover basic family needs without reliance on outside assistance. (2023). They further elaborate the basic family needs include food, housing, transportation, insurance, utilities, childcare, taxes, and inflation. However, other expenses, such as vacation, dining out, and savings, are typically excluded. According to the MIT living wage calculator, which adjusts for each state, the location with the highest living wage is the District of Columbia at $20.80/hr for a full-time individual. South Dakota has the lowest living wage for individuals, requiring $13.87 an hour, or $28,853 a year. There is no living wage calculation for part-time employees, as a person is expected to work full-time to support themselves. According to the companys security filings, the median UPS employee made $52,000 last year. I was unable to find a credible source documenting the average pay for delivery drivers. However, according to representatives of UPS part-timers make an average of $20 an hour after 30 days on the job while enjoying the same health care and pension benefits as full-time workers. (Ivanova, 2023). And full-time drivers have the potential to earn as much as $95,000 per year. Both full-time and part-time salaries already exceed the living wage threshold.

Based on this information, the livable wage defense is not valid. Data indicates the employees were already at or exceeding, in most cases, a livable wage. The position that other companies pay more is also not a valid defense. In this country, employees can seek employment wherever they see fit. If drivers at Amazon are making more, then the UPS employee may seek employment there. However, as a CEO who wants to recruit and retain the best employees, they should want to pay more and do so as the budget allows. The IBT took advantage of the situation. With the employee collaboration and the threat of strike, they know the impact it would have on the entire US economy. They abused their power and made unreasonable and greed-driven demands.

The UPS workers' threat to strike is not an uncommon occurrence. Several industries have faced similar situations recently of workers walking out on their shifts and demanding more than what has been given to them by their employers. Understandably, this is both because of extrinsic and intrinsic motivation, such as inflation, the 2020 Pandemic, the rising cost of living, and feelings of being overworked and underappreciated. However, what these employees are giving up with the collective bargaining of contracts is their autonomy to negotiate for their specific situations. As well as affecting the reputation of the company they work for and overall economy in their societies.

The workers are feeling the pressure of life in 21st century United States, however almost destroying the U.S. economy is not the answer. Sure, everyone could use a raise, but not everyone needs a boost to their health benefits or the upgrades they were asking for and thanks to the Taft-Hartley Act of 1947 which banned closed shops (union hire only businesses) they are allowed to negotiate individual contracts for what they specifically need and not worry about exclusive representation (FAQ: What is a right to work law? 2023). This became the start of the Right to Work laws which protected and expanded an employee's right to choose whether they want to be in a Union and participate in things like collective bargaining and mandatory union strikes. This has led to lower unemployment rates, higher net income, and lower costs of living (Kenton, 2022). Something tailored to the individual is going to last longer and give better results than a blanket policy.

At the end of the day this show of strength in numbers would have affected businesses and consumers alike just like any strike we have seen in the past. In 2022, UPS handled 20.8 packages per day and in 2023 they handle about 28% of the packages mailed in the US (Black, 2023; Isidore, 2023). Meaning the immediate effect of the strike would have caused billions of dollars of economic impact.

The estimate from Anderson Economic Group said the hit to businesses and consumers would be $4.6 billion by itself, causing significant and lasting harm for small businesses, household workers, sole practitioners, and online retailers across the country. Other costs include estimated direct losses at UPS of $816 million, as well as $1.1 billion in lost wages by 340,000 members of the Teamsters union at the company. The remaining costs would be born by UPS suppliers and from lost tax revenue. (Isidore, 2023)

This would have caused so much damage to the reputation of UPS for reliable service and delivery of packages, but also the reputation of other small businesses who use UPS and gives a window of opportunity for competitors to build brand loyalty with existing UPS customers. This also would have affected the unionized drivers in a large capacity to not be able to receive their deserved income.

In conclusion, the IBT initially brought to the bargaining table 20+ pages of contracts to negotiate; most demands were excessive and unreasonable. Their demands for high pay increases, free health insurance with no copays or deductibles, additional holiday pay, and a pension are nothing more than greed. Employee greed for more money and benefits drives up prices for goods and services. We can expect the shipping rate with UPS to increase to cover the expenses the company will incur as part of the new agreement. Everyone in this economy will feel the impact. The job of a delivery driver and package sorter is a blue color job that requires no skill and should not be compensated with a benefits package exceeding that of a college-educated nurse. While it is easy to understand their motivations, the UPS employees took advantage of the situation. The existing 5-year contracts were set to expire on August 1, 2023. The pandemic brought to light the dependency the United States economy has on the shipping industry. As well as other large companies being on the verge of layoffs. It was the perfect trifecta to demand and receive disproportionate accommodation.