USA Driver Pay Reaches $170k
United Parcel Service (UPS) has issued a cautionary statement about its anticipated profits for the year, attributing the decrease to recent wage hikes granted to US workers under a labor agreement. This announcement comes in the wake of the most significant inflation surge in the United States in four decades.
As per the terms of the five-year contract, UPS revealed that the average annual earnings for a full-time driver would rise to approximately $170,000 (£135,000), encompassing healthcare and additional perks.
The pay increases have materialized amidst a period of heightened inflation, with prices experiencing a 3% uptick over the year leading up to June. This comes after a more substantial increase of over 9% in the prior year. As the cost of living escalates, pressure on household finances has sparked labor unrest, prompting unionization drives at companies such as Starbucks and instigating strikes across the nation.
The Teamsters union’s threat of a strike recently posed challenges for UPS, causing customers to reroute roughly a million daily packages to competitors, resulting in a sales loss of around $200 million.
In an investor update, UPS indicated that the labor deal with the Teamsters, likely to gain worker approval this month, will also contribute to diminished profits. The company now forecasts an adjusted operating margin of 11.8% for the year, a drop from the initial projection of 12.8% in May. This decrease is further influenced by declining shipments due to economic weakening.
UPS boasts the largest unionized workforce in the US and is renowned for its relatively generous compensation package. The agreement with the Teamsters has significantly improved conditions for part-time employees and drivers, including higher starting pay, recognition of Martin Luther King Jr Day, and commitments to better work environments.
