Unions in the United States have always been subject to immense pressure from employers. They exist to counter employers’ desire to take as much as they can get from workers. As a result, they’re always under attack. With weakened unions come lower pay and standards for all of us who sell our labor for a living. Each lowering of union-contract standards sends a signal: Labor is weak, keep pushing.
Ever since the 1970s, unions have accepted all sorts of arrangements they once would have refused, with concessions littering contracts, leaving a trail of working-class decline. For decades, two-tier unions have been central to the attack on workers’ rights.
“Two-tier” refers to contracts that divide a workforce into wage and benefit tiers based on their hiring date. Workers in both tiers are union members, but they toil under separate conditions. Usually, the lower-paid tier comprises workers to be hired after the contract’s negotiation, leaving them little recourse, even as they are forced to accept lesser terms.
The latest two-tier crisis centers on one of the United States’ largest private-sector unionized employers, UPS. If the company gets its way, it will be a signal to employers nationwide: You can’t directly bust your employees’ union, but here’s a way to divide and conquer, undermining them from within and locking in division between workers in the process.
Despite recently posting $1.49 billion in second-quarter net income, a reflection of e-commerce-induced growth, UPS is pushing for two-tier in its negotiations over a five-year contract that will cover 260,000 of its employees. These workers are Teamsters, members of one of the country’s largest unions. They account for approximately 6 percent of U.S. GDP. Should they strike — as they successfully did in 1997, with a majority of the public on their side — they have the power to significantly affect the economy. These are a quarter-million workers in one of the few remaining secure blue-collar jobs; their working conditions matter.
According to the tentative agreement, UPS wants to create a new class of hybrid drivers. Sundays and Saturdays would likely be part of these drivers’ workweeks, a response to pressure from online-ordering giants such as Amazon.com. According to the draft, these drivers will lack some of the rights current drivers enjoy, such as a say in scheduling. They’ll be paid significantly less than their peers, with a cap on pay set at $34.79, in contrast to $40 for standard drivers.
It’ll be an underclass, one with no means to be represented at the current bargaining table. To understand how much harm that can do, one need only look at the history of two-tier workplaces, especially after the system was temporarily implemented by the U.S. auto industry in the 1970s. Facing competition from abroad and recession at home, Chrysler, Ford and General Motors approached the then-strong United Auto Workers, pleading poverty.
Fearing job losses, the UAW accepted terms that created a lower tier for a worker’s first 90 days, after which they caught up to the standard. It reflected the companies’ desire to hire for slightly cheaper than full pay and the union’s desire not to give the companies reason to stop hiring.
While that shift wasn’t immediately disastrous for workers, the bosses were playing the long game, and it ultimately succeeded in rolling back autoworkers’ living standards, opening the door for many more such concessions in the years to come. Other employers were watching closely, as the auto industry was a central node in the U.S. economy and a strategic center for union power. As went the auto industry, so went the nation.
By 2007, with the auto industry on the verge of collapse, two-tier was reinstated, with one difference: This time, the tiers were permanent. The concession did more than impoverish workers in Detroit: As Dave Jamieson wrote in HuffPost, it “became an anti-union talking point in the UAW’s failed bids to unionize Volkswagen and Nissan plants in the South.” It was hard to convince workers that a union was of and for all of them with such recent evidence to the contrary.
UPS doesn’t have the excuse of low profits. What it does have is a position as the biggest company in the package-delivery business, followed closely by FedEx. Such control over a market gives the company the confidence to try to set the rates of labor costs. UPS is playing the long game, seeking a toehold in flush economic times so that it will allow them to expand the two-tier model when things go south.
As it stands, thousands of rank-and-file members, organized around Teamsters for a Democratic Union and Teamsters United, are calling for workers to vote the contract down. Ninety-three percent of members voted to authorize a strike should UPS refuse to agree to a passable contract. Although a strike seems unlikely, members may well force recalcitrant negotiators back to the bargaining table.
Should the members agree to the proposed contract, it will be a signal heard in every boardroom. It’ll be one more sign to employers that they can do as they please: pit workers against each other, even if they’re in a union; pay them a pittance if they’re not.
Alex Press is an assistant editor at Jacobin magazine.