Earlier this week, United Parcel Service (UPS) slashed its financial outlook after reaching an agreement with the Teamsters Union in late July. This deal ensures delivery drivers receive an annual pay of $170,000. Even part-time employees are set to earn $25.75 an hour. As a result, UPS job searches are erupting nationwide.
Bloomberg cited data from online jobs website Indeed, which recorded a 50% jump in searches for "UPS" or "United Parcel Service" in the job title last month when the union secured $30 billion in new money for its members over the next five years.
Google search results show "UPS driver jobs near me" soared to a record high.
We should note the tentative agreement has yet to be accepted by the Teamsters Union, and a vote will be announced on Aug. 22.
Unions have been pushing companies to improve on-the-job conditions amid the worst inflation in a generation and two years of negative real wage growth that decimated households. Companies that have conceded to union demands, like UPS, are emerging as the most sought-after jobs due to pay hikes.
While it's unlikely the 340,000 union members will pass up this sweetheart deal, UPS slashed its full-year outlook this week on sliding package delivery volumes and costs associated with the union. Bloomberg explained the souring conditions for UPS means: "The company is most likely not going to hire en masse right now."
Meanwhile, there are other rumblings in the transportation space. Pilots at FedEx rejected a union-brokered deal that would have raised their wages by about 30% through 2028. Union members were displeased with FedEx, citing higher wages at airlines.
"Labor groups seem to find it more appealing to reject the first offer to get a better second offer," Helane Becker, an analyst at investment banking company TD Cowen, said. She added, "Sometimes it doesn't get better."
Some labor fights with unions and companies have sparked turmoil. Trucking company Yellow Corp. filed for bankruptcy this week, placing the blame on the union:
"We faced nine months of union intransigence, bullying and deliberately destructive tactics."
And the wave of union bosses making outsized demands at other companies could only be in the beginning innings. This will only lead to higher prices and could drive some companies out of business, such as what happened to Yellow.
Rising labor disputes and wage inflation will likely mean elevated overall inflation, signaling the Fed's job isn't done.
