[Socialism Today, No 22, October 1997, p. 22-27]
Teamsters Rock UPS
Picket lines turned into celebrations on 19 August, when the provisional agreement with UPS was announced. Through determined, united action, 185,000 Teamsters had defeated Big Brown, the Universal Parcel Service of America, Inc. Lynn Walsh reports.
“Outside the UPS depot on the West Side of Manhattan”, reported the New York Times, “triumphant strikers were lifting clenched fists in celebration and shouting thanks to passing motorists who leaned on car horns in support”. ‘It’s a big win not only for the union but for labor’, said one driver: ‘This was labor against corporate America’.
UPS provoked the strike, but after 15 days and $650m losses, the company was forced to surrender. Despite the limitations of the new contract, and the obvious danger that management will try to claw back concessions, the settlement is a victory for the Teamsters. It is a turning point which reverses a series of defeats since Reagan smashed the air traffic controllers’ strike in 1981. The Teamsters’ action inspired a surge of public sympathy, and their victory has lifted the confidence of workers generally.
Within the union, it will strengthen Ron Carey against James Hoffa Jr, champion of the rotten ‘old guard’, in the re-run elections which have now been ordered by the Federal monitor. The victory creates the opportunity for a strengthening of the US’s seriously weakened trade unions. But this will not happen automatically. The revival of organised labour calls out for a fighting anti-capitalist programme on jobs, wages and benefits to mobilise millions of workers to take on the corporate bosses and at the same time re-build and democratise the unions.
The strike weapon is far from dead
The strike began on 3 August, when UPS refused to improve on its ‘last, best, final offer’. The company insisted that it would pull out of the Teamsters’ multi-employer pensions scheme in favour of a UPS scheme. In answer to the union’s demand for 10,000 new full-time jobs, the company said it would create 2,000 over five years. After the rotten UPS contract signed by the union’s ‘old guard’ in 1982, the company had developed a two-tier labour force, relying more and more on low-paid part-time workers with little or no benefits. Since 1993, UPS had created 46,000 jobs, but 38,000 of them were part-timers, with a starting wage of only $8 an hour compared with $20 for full-time drivers.
UPS evidently decided to provoke a strike. They mistakenly calculated that they could break the Teamsters. Apart from the general decline in union strength (with under 10% of private sector workers organised), they saw the Teamsters as a divided union, with the battle between Carey and Hoffa still unresolved. They knew the Teamster’s strike fund was empty. Banking on the ‘corporate loyalty’ they have tried to build up, management hoped that a large number of workers would be ready to strikebreak. As soon as the strike began they lobbied for Clinton to intervene and halt the action, as he had with the American Airline pilots earlier this year.
UPS miscalculated. They underestimated the Teamsters’ determination and they failed to recognise a change in the mood of US workers and middle class layers.
The Teamster’s action demonstrated that the strike weapon is far from dead. After 1981, when Reagan dismissed 11,500 striking air traffic controllers and smashed their union, Patco, strikes tended to be associated with defeat and demoralisation. Not all were defeated, but several long, bitter strikes – for instance, Caterpillar and Staley in Illinois, the Free Press and News in Detroit – did end in defeat. They were left isolated by the leaders of the AFL-CIO (the US equivalent of Britain’s TUC), who themselves accepted the idea that strikes could no longer be effective.
When the UPS workers were called out, however, there was overwhelming support from the company’s 185,000 union members. There were pickets at every UPS depot, and only a handful of delivery trucks were able to operate, mainly driven by supervisors. At the Somerville (Boston) depot, the police attacked pickets trying to stop trucks, arresting a dozen or so.
Despite the minimal $55 a week strike pay, there was solid determination. A shop steward at the Boston, Watertown depot said: “‘We’re here for the long haul. We’ll do whatever it takes’. There was also decisive support for the Teamsters from the pilots, members of the Independent Pilots Association, who operate UPS cargo planes. They came to the rallies in their uniforms, and were warmly cheered. Many activists and community organisations also supported picket-lines and rallies.
The Carey/Hoffa contest did not divide the strikers: ‘This strike brought us together’, said one picket: ‘It was like brothers and sisters getting together. That’s how strong the support was’.
Despite the part played by the US Mail Service in moving extra packages, the strike quickly began to bite on businesses. After the first week, when UPS had lost over $300m, the company hinted that they were going to hire ‘replacement workers’, scabs, the method increasingly used by bosses to break strikes. Pickets quickly responded with big yellow placards carrying Jack London’s famous definition: ‘A scab is a two-legged animal with a corkscrew soul, a water-logged brain and a combination backbone made of jelly and glue. Where others have hearts, he has a tumor of rotten principles’.
In fact, UPS backed off on replacements. “Why?” asked a commentator: “Public opinion is clearly on the strikers’ side right now”. (Boston Globe, 13 August). Opinion polls showed two-to-one support for the Teamsters. More concretely, UPS workers are highly skilled, popular workers, and the company was forced to recognise that the use of scabs could seriously damage their strong relationship with customers. In any case, with unemployment down to 5%, UPS would have found it difficult to recruit effective replacements. With a nation-wide business, UPS could not re-locate. After a week, they feared their 80% share of the small parcel business would be seriously eroded.
Teamsters’ demands resonated with the public
The strength of public support was a big factor in the victory. Despite the union’s shameful neglect of part-timers in the past (when officials saw them merely as a source of income for the Locals), the Teamsters’ demands for more full-time jobs and better part-time pay resonated with millions of workers who have been forced to work harder and longer for wages they cannot live on. Even affluent middle-class people are becoming outraged at the million-dollar salaries and bonuses paid to company executives while the living standards of the majority are falling. While company profits have soared to a 40-year peak, average wages, after allowing for inflation, are 8% lower than 1973. In 1995, average household incomes were, in real terms, 4% lower than 1989. Over 6.4m workers make less than the legal minimum wage, now $5.15 or $10,000 a year on a full-time annualised basis – way below the official poverty level of $15,600 for a family of four. At the same time, job security and conditions have been drastically eroded by the bosses’ increasing reliance on part-time, casual workers who are treated as second class, ‘contingent’ workers, with low pay and mostly without health insurance or pension tights. There are about 23m part-timers, a third of whom would prefer full-time work and half who need more hours.
The massive popularity of the strike no doubt encouraged John Sweeney and the AFL-CIO leadership to support the Teamsters’ strike fund with $10m a week loans, ‘for week, after week, after week’. The mood also led Clinton to resist big business pressure for him to intervene and ban the strike. Earlier this year he ended an America Airlines strike as soon as it began, using powers under the National Railway Labor Act. The UPS strike, however, was covered by the Taft Hartley Act, which empowers the president to act if a major strike ‘imperils national health or safety’. Clinton’s interpretation was that it did not. He adopted a stance of ‘benign neutrality’, leaving it to Labor Secretary Alexis Herman to mediate between the two sides.
Electoral calculation undoubtedly played a significant part in this. Vice-president Al Gore is already campaigning all out for the Democratic presidential nomination for 2000, and is desperately trying to project a more ‘pro-labor’ image. More pressing are next year’s mid-term congressional and state elections. So great was the need to identify with a popular cause that an amazing array of Democratic Party politicians rushed to speak on the Teamsters’ platforms. The rally held outside the Somerville (Boston) depot on 8 August, for instance, was more like an election hustings than a strike rally. Joe Kennedy and other Representatives, together with two or three Massachusetts state senators and the local mayor, declared their undying support for the workers. Even the Republican acting state governor, Cellucci, turned up at the rally – in marked contrast to his predecessor, Weld, who last year provocatively crossed a Commonwealth Gas strike picket to collect a campaign donation from the company.
UPS forced to make major concessions, but with dangerous ‘get out’ clauses
To end the strike, UPS had to make major concessions, although it gained a five-year contract and there is undoubtedly a lot of dangerous fine print in the final contract. The deal will far from end the two-tier job structure.
Jobs: UPS agreed to create 2,000 new full-time jobs a year for five years, in contrast to its original offer of only 200 a year, as well as creating new part-time jobs. But the new full-time sorter and loader grades will still not get the same as current full-time drivers. According to some reports, there are clauses which could allow UPS to get out of creating more full-time jobs if there is not enough business. The Investors’ Business Daily (20 August) commented: “The biggest gain the company made was to prevent any effort to limit its ability to hire new part-time workers. There are no such restraints under the pact”.
Wages: The starting rate for part-time loaders, which has been $8/hr since 1982, will rise to $8.50/hr. Wages of part-timers, who now average $11/hr, will increase by $4.10 over five years. This still leaves a massive differential between part-timer and full-time rates. For the backbreaking sorting and loading, much of which is on late and night shifts, UPS will still be relying heavily on low-paid, part-time workers who mostly leave before they get onto higher rates. Full-time workers, who now average $19.95/hr, will get a $3.10 rise over the same period. The full-timers’ increase is 3.1% a year, which is only just in line with current inflation, making no allowance for higher inflation later.
Weight-limits: UPS dropped its ‘final offer’ insistence on the company’s right to raise the maximum parcel weight above 150 lbs at any time without union agreement. Maximum weight, a key health and safety issue and the cause of the 1994 walk-out, will now be subject to further negotiation between UPS and the union.
Sub-contracting: Teamsters’ leaders say the interim agreement means the phasing out of sub-contracting, except at peak periods.
Pensions: UPS was forced to abandon one of its main aims, withdrawal from the Teamsters’ multi-employer pension scheme. The company dangled the promise of 50% higher retirement benefits for UPS retirees if they accepted a UPS-only scheme to be jointly run by union and management. Whatever the carrot offered now, this would have been a rotten deal for Teamsters. The Teamsters’ multi-employer schemes, which cover trucking, construction and other fragmented industries, allow workers to switch employers without reducing the value of the pensions. Workers in single employer plans who switch their jobs can end up with meagre pensions, or even no pension at all.
The main reason UPS was ready to offer bigger company contributions (at least for the time being), however, was so the company, rather than retiring Teamsters, could reap the benefits of the rising stock market. In single-employer schemes, the company is committed only to paying out the agreed pension benefits. If the pension fund’s income from investments rises rapidly, the company can reduce its contributions or even cream off a surplus. In union-administered multi-employer funds, extra investment income can be used to pay out better pensions.
A broad study of pension plans (reported in the New York Times, 26 August) showed that between 1980 and 1993 the ‘generosity factor’ (the annual increase in benefits per worker) rose from $700 to $900 for single-employer schemes but rose $400 to $1,000 for multi-employer schemes. If UPS had won on this issue, not only would the future pension benefits of Teamsters have been seriously jeopardised, but other big corporations would undoubtedly have been encouraged to pull out of multi-employers schemes.
Bosses fear Teamsters’ victory will set a precedent for other low paid workers
The strike is seen as a big victory for the Teamsters, a serious defeat for UPS, and a blow to big business. Many Teamsters are unhappy about a five-year contract. ‘It ties us up for too long’, said one striker. In the workplaces, the UPS management is NOW striving to regain the upper hand. Some strike pickets have been victimised, and managers are trying to toughen up on discipline. Despite the company’s promise to create new full-time jobs, the new contract does not really tackle the company’s two-tier employment policy.
More could undoubtedly have been won if the rank-and-file had been more actively involved in organising the strike. The proposed settlement should have been put to a mass vote of the membership before a return to work, so that the rank-and-file could study the proposed contract and take a democratic decision before the strike was demobilised. Nevertheless, given the retreat of the unions since the early 1980s, the Teamsters’ UPS victory marks an important turning point.
The right-wing Wall Street Journal (20 August) tried to write their own score card: ‘UPS Pact Fails to Shift Balance of Power Back Toward US Workers’. Expressing their contempt – and fear – for workers, they opened with the comment that the “unsung hero – or rather sucker – behind the current boom … (the) docile American worker, too cowed to demand a pay rise despite surging corporate profits’, was not about to be turned into “a newly emboldened and empowered workforce”. Further down the same column, however, the Journal blatantly contradicted itself: “There are hints, in myriad surveys, that the worker insecurity invoked by Mr Greenspan (chair of the Federal Reserve Bank) is receding, that employees are becoming emboldened”.
The real effect of the UPS strike was shown by two reports in the Boston Globe. Just before the strike, the Globe (27 July) ran a feature on the front page of its business section under the headline: ‘Unions pushed to the wall: Strike strategies losing clout as companies take hard line; More companies willing to endure losses to fight for long-term goals’. Afterwards, the paper’s front page (20 August) carried the headline: ‘UPS Accord seen lifting Teamsters, other unions’.
The bosses are clearly worried that the UPS victory will set a precedent for other workers. They are especially alarmed by the surge of public sympathy for the strikers, in marked contrast to public indifference or hostility to the PATCO strikers in 1981. “One of the most remarkable facts about the walkout at the world’s largest packet delivery company”, commented the New York Times‘ editorial (20 August), “was the extent of public support generated by the 185,000 strikers … the corporate downsizing of the 1990s has undeniably made Americans more doubtful about their employers and more sympathetic to those whose wages have not kept up’.
A Labor expert told the Times (20 August): “I can assure you that right now discussions are going on in executive offices in Walmart, Kmart, Federal Express, all these labor intensive service firms, about how to rethink their labor strategy. All these non-union firms that want to remain non-union might raise wages and otherwise emulate what’s going on in the union sector”.
Carey faces re-run election against ‘old guard’ champion, Hoffa Jr
The UPS strike will strengthen Ron Carey and other reformers in the rerun of the presidential and executive elections which will be held within a few months. The re-run was ordered by the court-appointed monitor immediately after the strike, on the grounds that the Carey campaign received over $200,000 in illegal funds.
Carey will probably improve on his narrow (52%) victory over James Hoffa Jr, son of the notorious Jimmy Hoffa, under whose presidency the Teamsters’ leadership was riddled with Mafia-linked corruption.
Carey won the presidency in 1991, defeating the ‘old guard’ right-wing leadership, 15 years after Teamsters’ for a Democratic Union (TDU) was launched with the aim of democratising the union and cleaning out corrupt officials. It was President Roy Williams, for instance, who originally fixed the UPS contract which opened the door to $8-an-hour part-timers shortly before he was jailed for his corrupt dealings with the mob.
When Carey won the presidency, he cleaned up the union at national level and cut down on the privileges of officials. This was a real step forward for the Teamsters, but Carey unfortunately did not act decisively against the old guard, who maintained a Strong influence at regional Conference and Local level. In fact, Carey made the mistake of holding out an olive branch to the old right wing, who did their best to obstruct reform and conducted a guerrilla campaign to undermine the new leadership. Instead of mobilising the rank and file to take on the bosses on wages, health and safety, health insurance and pension benefits, etc., while at the same time dealing with the old guard, Carey tried to reform the union from the top down, relying mainly on pro-TDU officials.
In 1994 Carey, who had himself worked as a UPS driver in New York, defied the no-strike clause in the UPS contract to lead a one-day walkout against UPS’s attempt to raise the weight limit of parcels from 70 to 150 pounds. The old guard were furious and did their best to sabotage the action, stepping up their campaign against Carey. Carey was forced to take tougher action, cutting back on officials’ privileges, disbanding regional Conferences and putting right-wing Locals into trusteeship. Carey’s leadership began to seriously weaken the old guard at Local level, a process which continued up to the 1996 election.
But Carey’s failure to mobilise the rank and file on a fighting programme meant that the new leadership failed to win decent contracts, a serious weakness. After some initial gains, Carey signed a series of concessionary contracts, especially with Master Freight. Despite the sabotage of the right wing, there was a determination on the Master Freight picket lines to fight to the end, but Carey called off the strike without a vote and accepted a contract allowing the employment of casuals. The high expectations aroused among the rank and file by Carey’s victory were disappointed. A series of national and local contracts allowed increasing use of part-timers, two-tier wage structures, sub-contracting to non-union companies, and erosion of benefits.
The old guard began to organise a serious fightback to retake the union leadership. They found a perfect candidate in the ‘junior Hoffa’, who stole all the TDU slogans in promising to restore “‘Teamster power’. Hoffa is a Detroit lawyer who has never worked in the industry. In his chequered career he has acted as a lawyer for a long line of shady business interests and old guard Teamster officials with mob links. In the campaign for the presidency in 1996, Hoffa Jr spent $3.7m compared to Carey’s $1.6m, and he was heavily backed by the capitalist press, especially the Wall Street Journal.
With a lot less cash, Carey ran a Democratic Party-style campaign. Since 1991, when TDU played a key role in mobilising activists against the old guard, the TDU had been allowed to stagnate. In the 1996 campaign, Carey relied heavily on full-time officials to distribute his material throughout the union. There was no mobilisation of rank-and-file activists to campaign for Carey and other TDU candidates.
The TDU had seriously declined as a force within the union. It had not been used to mobilise rank-and-file members for campaigns on wages and conditions. TDU has not been able to take an independent position, criticising Carey on issues where he retreated. Local TDU leaders have been hostile to militant activists attempting to defend members’ interests.
The result of TDU’s decline was a very narrow victory for Carey in 1996, 51.71% of the votes compared with Hoffa’s 48.28%. Immediately after the campaign, Hoffa and his supporters went on the offensive, alleging illegal funding of Carey’s campaign and demanding that Carey and other reform candidates should be removed and disqualified. This led to an investigation by Barbara Zack Quindel, who was appointed in 1989 by a federal court to oversee all Teamster elections. This was the result of an agreement between the Teamsters and the Justice Department, after a Federal prosecution alleged systematic involvement of Teamster leaders with mob gangsters.
A few days after the end of the UPS strike, Quindel released a report which found a complex network of schemes to funnel illegal donations to Carey’s campaign. The schemes included the over-billing of the union by a tele-marketing firm, which then indirectly channelled the cash to Carey’s campaign. There was also a scheme to swap Teamsters’ contributions to political campaigns in exchange for equivalent donations to Carey. Carey denies any knowledge of these schemes, but two of his campaign advisors are now under indictment for illegal diversion of funds.
Hoffa, with the support of Republican politicians, is demanding that Carey should be disqualified. They are threatening court and congressional action to overturn Quindel’s rulings. They allege that Quindel, with the connivance of the Justice Department and Clinton’s administration, are soft peddling on Carey because the Teamsters donated around $8.5m to the Democrats campaign funds over the last five years. At the moment it seems likely that the Federal court will endorse Quindel’s proposals for a re-run of the elections for president and 21 other leading positions.
When Quindel’s decision was announced, an editorial in the New York Times (23 August) conceded that Carey was likely to succeed: “Provided that nothing turns up directly linking Mr Carey to the kickbacks, he stands a good chance of winning the re-run vote. The successful Teamsters’ strategy in the United Parcel’s strike, including strong support from the AFL-CIO and a defter public relations effort than labor has mounted in many years, greatly bolstered Mr Carey’s personal prestige’. “A bitter election campaign may well tarnish Carey’s image further”, comments Business Week (8 September). But even this journal admits: “With Hoffa, the Teamsters are likely to get no reform at all”.
The end of the ‘Patco syndrome’ and the start of a union revival?
Carey and John Sweeney, president of the AFL-CIO, were quick to claim that the UPS strike reverses the ‘Patco syndrome’ and heralds the rebirth of the unions. It has certainly raised the prestige of unions and created the opportunity for a strengthening of organised labour. But this will not develop automatically, just because the climate has changed. The Carey leadership is more combative than most, and seized an unusually favourable situation to score a victory. This will encourage other workers to take action.
But a general advance for the unions will take more than the kind of recruitment drives that have been organised recently, with $20m a year backing from the AFL-CIO. Some of them have been very successful, with the unionisation recently of thousands of teachers and school aides in Dallas, strawberry workers in California, home health care workers in Los Angeles, and more recently, at Federal Express. The crucial question is, what action will the unions organise to defend their members’ interests? More members mean more dues for the union, but what happens when the workers come into conflict with the bosses? In all too many cases, the union leaders have proved unready or incapable of leading a real struggle, or even effectively supporting work-place struggles initiated by the rank-and-file. If the newly recruited workers do not get strong union backing, they will tend to fall away and recognition ballots can be reversed.
A big advance in work-place organisation will depend on the active involvement of workers at the grass roots, which will require a radical transformation of the US unions, which are extremely bureaucratised and undemocratic. The prospects for such a change cannot be separated from the need for an offensive against big business on jobs, wages, working conditions, and benefits. It will depend on a broad, mass movement of the working class, which will take on an anti-capitalist form. The Teamsters’ strike shows that the conditions are being prepared for such a struggle. Within US society, there is a deep reservoir of discontent and anger building up for an explosion.
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