TOPICS > Economy

The Strike Continues

August 8, 1997 at 12:00 AM EDT


CHARLES KRAUSE: Now, for more on the strike and the issues it raises, we’re joined by Harley Shaiken, a professor of industrial relations at the University of California, Berkeley, and Jeffrey Sonnenfeld, a professor of organization and management with Emory University’s School of Business. He’s also a consultant to the UPS company. Gentlemen, welcome. Prof. Sonnenfeld, there are reports that UPS is losing $50 million a day as a result of this strike. And, as we’ve heard, there’s not much progress apparently in then negotiations. How much pressure is the company under to settle?

JEFFREY SONNENFELD, Emory University: (Atlanta) The company is under enormous pressure to settle. And I think when you saw David Murray’s frustrated face on the screen–I think that was a Monday night clip that we just saw on this show–or their bewildered faces walking out of the negotiations Sunday evening when they broke off and the Teamsters walked out, what you saw is they were so close I think that they thought they could have had an agreement.

And they–they thought–this is a company that has always valued fairness and high rewards, as you heard in your package. These are the highest paid workers in their industry, and they thought they were offering them a great gift with this pension that’s going to more than double the payments they’re making because the enormous unfunded liability of the Teamsters’ own fund, so they said let’s bring it in the sunlight, away from corruption, inefficiency, jointly manage it. And there’s a lot of–they thought that the Teamsters would jump at that.

The company has always been a very pro-union company. I think what’s astounding is even at this point you don’t hear any UPSers taking on what many times we see–as I know my colleague Harley Shaiken has seen this many times–hostile management, a lot of strike breaking, sort of workers hired or attacks on unions’ integrity. They invited the Teamsters to organize actually in 1921. It should be a strong UPS and a strong Teamster at the same time.

CHARLES KRAUSE: Fair enough. But the point is that the company has said that the offer that it made was the last and final offer, and apparently, the union isn’t going to settle unless there are some changes in it. So, again, how much pressure is the company under to revise this offer in order to get negotiations really underway?

JEFFREY SONNENFELD: Well, I think the company would like to see the offer actually brought forward and voted on; is that the rank and file members haven’t actually had this brought to them for a vote.

There’s a good sense out there that the workers would jump at this; that the Teamsters members, the UPS Teamsters would jump at this officer because it’s a very attractive one. And that’s what they’d like to see happen, but this is a fantastic wage package. This is job guarantees. You know, we hear so much about the new social contract, where so many employers are justifying downsizing it. This is not a company that does that.

CHARLES KRAUSE: All right, fine. Let me go to Prof. Shaiken for a minute. Prof. Sonnenfeld is saying that if only the UPS workers were allowed to vote on the contract, they’d vote for it, and the strike wouldn’t have been necessary. What’s your take on that?

HARLEY SHAIKEN, University of California, Berkeley: (San Francisco) Oh, I think that’s not the case. They might jump at it, but not necessarily to accept it. At the heart of this strike are a number of specific issues certainly but really is the question of creating decent jobs that pay fair wages. And if we have a very profitable company, such as UPS, a growth economy, and we can’t create more full-time jobs under these circumstances, I think we’d really have to ask when could we create these jobs.

I think at the core of the strike the issue of creating more full-time jobs is a very central one that also addresses so much of the economic anxiety ordinary Americans feel. And at UPS it’s not an argument simply of whether part-time jobs are good or bad but rather that there are over 10,000 jobs where workers are working more than 35 hours a week that are classified as part-time jobs.

So to call those full-time jobs, which is one of the contract demands the union has, I think sets an example of creating more decent jobs and creating the purchasing power that goes along with those jobs. So I think those are really the issues that underlie this dispute.

CHARLES KRAUSE: What specifically is the union demanding of the company with regard to the jobs, the full-time jobs?

HARLEY SHAIKEN: Well, the union is demanding that during the life of this next agreement 10,000 full-time jobs be created, but, in effect, you have, as I mentioned, 10,000 workers currently working over 35 hours a week. So really you’re talking about not simply creating full-time jobs out of thin air but reclassifying jobs in a way that workers earn full-time wages and full-time benefits. Starting wages for part-timers at UPS has been frozen since 1982.

Full-time wages have gone up considerably under those–during that time period. So you have an important difference of wages here, but you also have important protections for full-time workers. 80 percent of the jobs UPS has added during this last agreement have been part-timers. If you switch the balance–and currently 60 percent of UPS workers are part-time–then you’re going to begin having a drag on full-time wages for the next agreement.

CHARLES KRAUSE: All right. Let me ask Prof. Sonnenfeld, who is familiar with the company’s position, why is the company–the company, as we reported, has offered a thousand new full-time jobs. The union is talking about 10,000 jobs. Why is the company resisting? Why is that not possible from its perspective?

JEFFREY SONNENFELD: Well, the company is guaranteeing the increase–that people will move–the present part-timers will have opportunities for at least 11,000 full-time jobs. Since the last contract, fully 13,000–this is three and a half years ago–13,000 part-timers moved into full-time jobs. There are 90,000 full-timers. Fully half of them were part-timers. The company’s sadly only growing so fast, but that’s tremendous absorption.

There’s no company in the country we can point to that has that kind of entry feeding of half of them–40,000 moved into these 90,000 part-time jobs. And these part-time jobs are fantastic part-time jobs. These are part-time jobs that, unlike the ones that–Harley is one of the nation’s experts on part-time jobs. And he can verify that four out of five employers that do offer part-time jobs don’t offer benefits. This is a fabulous benefits package. If you go to a restaurant–some fast food restaurant–that’s paying $10/$11, like UPS, on average or up to $15, they’re not offering the benefits package that’s equal to $6/$7. This is a $17 an hour part-time worker. Full health and benefits. Nobody knows of a UPSer who is in dual career situation, including part-timers, whose spouse has a better plan; that the family elects that spouse’s plan.

There are schoolteachers and clergy as part-timers who work at UPS because this is such a lush benefits package. This is essentially more than a $17 an hour worker, with career opportunity, training, and a job guarantee. How many companies are providing these contract guarantees to part-time and full-time, plus 13–a movement of 11,000 guaranteed into the ranks?

CHARLES KRAUSE: All right. Let me go to Prof. Shaiken. You’ve heard what Prof. Sonnenfeld has said. Is that correct? It seems to contradict some of what’s been certainly reported in other places?

HARLEY SHAIKEN: No, actually I don’t think it is correct. Before our eyes glaze over with all the numbers, I think, overall, what we we’re talking about is a union demand that affects about 5 percent of the total work force at UPS. And UPS made over a billion dollars last year.

The real issue is: Can a company this profitable in an industry–a service industry–that depends on the commitment of its employees and the professionalism of its employees–in both these areas I think we would both agree UPS employees have done 110 percent or more–can a company under these circumstances have the wherewithal to create better career paths, more full-time jobs? Because if it can’t, then as an economy, we are in very serious trouble.

The whole history of this economy in post World War II America is people entering the middle class by working for a firm and being able to prosper and to grow at that firm. What we have here is, in effect, a form of hidden downsizing. More jobs are created, but they are part-time jobs that pay about half of what the full-time jobs pay.

CHARLES KRAUSE: Let me go to Prof. Sonnenfeld very quickly.

JEFFREY SONNENFELD: Which is more than twice–this is a figure which is more than twice the minimum wage. It’s a very high-paying job at $17 an hour, with benefits. It’s extraordinary. And this is the world’s largest employee-owned firm. Who benefits from these profits?

And by the way, that billion dollars represents just 1 ½ percent on revenues. And sadly, that’s not such a great return. And where does that money go? 95 percent of it is reinvested back in the business. The other 5 percent goes to the employees. 100 percent goes to the employees. 95 percent of the business-


JEFFREY SONNENFELD: 5 percent–as to the employee-owners, which are 60,000 of them are hourly workers, 40,000 are managers; that’s everybody. There are no greedy Wall Street barons in this picture. There’s no greedy downsizers in this picture.

CHARLES KRAUSE: All right. We’re going to have to leave it there. Thank you, gentlemen, both very much. Thank you.