This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
https://www.barrons.com/articles/u-s-steel-usw-right-bid-cliffs-89cbf208
The battle for
United States Steel
has already taken a number of unexpected twists and turns. Investors just got another one.
Housing market has hit ‘rock bottom,’ says Redfin CEO
Wall Street got busy Monday calculating the impact of a strike on the Big Three automakers amid increasingly fraught labor negotiations between union workers and companies, and a “greater likelihood” of a walkout next month.
Also on Monday, President Joe Biden weighed in, urging the United Auto Workers and Ford Motor Co.
F,
General Motors Co.
GM,
and Stellantis NV
STLA,
to “to work together to forge a fair agreement.”
Negotiations so far have been tense, and the contract expires in one month.
Citi analyst Itay Michaeli estimated that a strike at GM lasting about two weeks impacting roughly about 100,000 vehicles would result in an impact of around $1.3 billion before interest and taxes; a five-week one, impacting about 280,000 vehicles, would result in a $3.4 billion impact EBIT. That would be a similar hit as GM’s 2019 strike, he said.
Recent headlines are “pointing to increasingly challenging labor negotiations and a greater likelihood of a strike next month,” Michaeli said.
A longer stoppage would result in shrinking dealer inventory and possibly start to impact sales sometime during the second half of October.
For Ford, Michaeli calculated an impact of about $1.6 billion EBIT for a two-week strike affecting about 130,000 Ford vehicles, growing to $4 billion in the case of a five-week strike affecting 330,000 Ford cars and trucks. Like GM, sales would be hobbled roughly by mid-October in the case of a longer strike.
“For both companies, the exact volume impact will in part depend on the extent of any Canada/Mexico downtime, and to that, GM appears somewhat better positioned than Ford due to GM’s higher exposure to Mexico production (including for pickup trucks) and other supply-chain considerations,” the analyst said in his note Monday.
Both companies likely can keep their guidance intact in the case of a brief, one-week strike, but a strike beyond the two-week mark “likely triggers a [fiscal-year guidance] cut, though it would set 2024 up with reduced inventory and greater volume/price recovery prospects,” Michaeli said.
A big question is whether a strike targets one specific automaker, as it was the case with GM in 2019, or all three at the same time — with more industry volume loss but also potentially a shorter strike, Michaeli said.
“To that, Ford is generally viewed to be the least likely to be selected as a target,” he said.
Deutsche Bank analyst Emmanuel Rosner said in his note Monday that he estimates an impact on earnings of about $400 million to $500 million for every week of production for each automaker, for a total of about $1.4 billion.
GM’s 2019 strike lasted almost six weeks, with a loss of about $3.6 billion EBIT; GM North America lowered revenue estimates as nearly 300,000 fewer vehicles were delivered.
Extrapolating the same $13,000 per unit in EBIT hit, Ford, GM and Stellantis could see [$550 million, $480 million, and $400 million] in weekly profit impact, reaching that $1.4 billion-a-week estimate, Rosner said.
“In a bad-case scenario with 8 weeks of strike against all 3 automakers, which would bring the UAW strike fund to very low levels, this could cause $11.2 billion in lost profits for the [Detroit 3],” Rosner said. “While this is considerable, it would still be considerably less than the impact from the lifetime of the 4-year contract,” which would create “a permanent raise in the OEMs’ cost,” he said.
The analyst also quantified the cost of UAW’s demands, focusing on the union’s “higher-probability asks” such as converting temporary employees into full-time workers, the elimination of a tiered-wage system, and about 40% base wage increase over the four years of the life of the contract. He left out “unlikely” to be met demands around pensions and post-retirement healthcare benefits.
“Our analysis suggests accommodating these demands would likely constitute a large but not destructive headwind to OEMs’ earnings in year 1, with incremental costs stepping up even further in subsequent years,” Rosner said in the note.
If these demands are granted with cost-of-living raises on top, Rosner estimated costs to all three automakers around $3.6 billion in the first year of the contract, amounting to $23 billion in total for the four years, “with highest hit to Stellantis, followed by GM and then Ford.”
“Specifically, we estimate that the conversion of temporary employees to full-time workers would cost D3 a total of $1.4 billion, not yet factoring in wage increases, with the highest impact to Stellantis given the higher [percentage] of temporary employees used currently relative” to GM and Ford, the analyst said.
Interviewing for a job isn’t fun. Today, so many companies make candidates jump through numerous hoops and several interviews just to get a chance to work for them. And now, the company behind the free-to-play online game Roblox is preparing to take the next, horrible step: interviewing people in-game.
Roblox is a giant online video game/content creation platform that allows players around the world to create and sell their own games and in-game items to others. Millions of players log in every day to play Roblox, though some reports suggest the whole thing might be pretty shady and not a safe place for creators or kids. Now it seems Roblox Corporation wants to use its own massive video game to help find new employees and even host interviews in its corporate metaverse.
Read More: You Can Be An Extreme Storm Chaser In This Game
On August 10, Roblox revealed its new “Roblox Career Center,” an in-game location created by the company as a way to provide “early career candidates” with a “firsthand” look at what it’s like to be a part of its workforce. The Career Center includes an Innovation Lab where candidates can see what’s coming next for the game, and a Podcast Lounge where you can listen to the company’s Tech Talk show hosted by co-founder & CEO Dave Baszucki. Also included is The Library, which holds a “curated selection of books and other reading materials” that job seekers can look over and read before their interview.
Roblox says its new Career Center will let the company “reach early career candidates across the world” while removing “geographic constraints” from the process. I feel like an email, video call or phone conversation can also remove those kinds of limitations, but okay. What is worse and more nightmarish is the hint, buried in Roblox’s blog post, that it will start interviewing people in the game itself in the future.
“Coming soon, we’ll be inviting candidates to conduct certain initial interviews directly within the experience,” teased Roblox, like a person with a spray bottle threatening a dog. Thankfully, it seems these in-game interviews will initially be “opt-in”, according to Axios.
Roblox says its in-game career center is designed for candidates and applicants who have likely grown up playing Roblox and who will feel comfortable looking for work and interviewing in it.
Look, I get that this might seem like it’s breaking down barriers and letting more people be interviewed by Roblox. Yet, the idea of directly looking for employees from the pool of young people who play your game a lot inside that very game seems a little predatory and very weird.
And as mentioned already, there are already so many pre-existing ways to interview and talk to people around the world. If only one good thing came from the covid pandemic, it’s the realization that many more people can work remotely and more places should support remote work in order to bring more diversity to their workplaces. Instead, what if desperate job seekers might one day be forced to download Roblox or some other awful metaverse, then forced to jump through another hoop in the hopes of finding employment to support themselves and their family? We continue to live in the worst timeline.
Zack Zwiezen
Source link
What’s going on with frozen fruit and vegetables?
Food prices rose 0.2% on the month in July after remaining unchanged in June, and they rose 4.9% on the year, while the cost of food at home rose 3.6% on the year, government data released Thursday showed. Prices of fresh fruits and vegetables rose just 1.2% year over year.
However, there were some big — even alarming — outliers: Frozen fruit and vegetable prices increased by 11.8% in July over last year, frozen vegetable prices rose 17.1% and frozen noncarbonated juice and drink prices rose 16.3%.
Those price rises are at odds with overall inflation figures. U.S. consumer prices rose to 3.2% in July from 3% in the prior month, the Bureau of Labor Statistics said this week. It was the first increase in 13 months.
Why have the prices of frozen fruits and vegetables shot up over the past 12 months, while the cost of fresh fruits and vegetables has increased so little?
Climate change and extreme weather conditions — from heavy rainfall to drought, particularly in California — have led to big problems for farmers. This has been compounded by issues related to the war in Ukraine and an ongoing increase in the cost of labor, experts said.
As a result, a large proportion of the fruits and vegetables grown were destined to be sold as fresh produce — which led to a shortage of ingredients for frozen goods, said Brad Rubin, sector manager at Wells Fargo Agri-Food Institute. “Because of the late crop, lots of produce is being pushed to the fresh market to keep up with demand,” he said.
California has experienced some drastic weather conditions over the last 12 months. Some 78 trillion gallons of water fell in California during winter 2022 and early spring 2023, according to data from the National Weather Service, delaying planting. And all that snow and rain was followed by a months-long drought in the region.
What happens in California is felt by consumers across the country.
“California produces nearly half of U.S.-grown fruits, nuts and vegetables,” according to estimates from the Sciences College of Agriculture, Food & Environmental Sciences at California Polytechnic State University in San Luis Obispo. “California is the only state in the U.S. to export the following commodities: almonds, artichokes, dates, dried plums, figs, garlic, kiwifruit, olives, pistachios, raisins and walnuts,” it says.
The subsequent price rises hit ingredients like strawberries and raspberries especially hard, Rubin added. Inventories of frozen berries are “near five-year lows” after winter storms in Watsonville flooded agricultural fields, damaging and delaying the strawberry crop. Most of the strawberries in the U.S. are grown in California.
Frozen fruits and vegetables have a longer supply chain than fresh produce, which can make them more vulnerable to disruptions in inventory, experts say. Rising energy prices are also pushing up the cost of cold storage.
In addition to those issues, U.S. farmers are dealing with increased labor costs and fewer migrant workers, partly due to changes in government policies and the closure of borders during the COVID-19 pandemic, according to a February 2023 report from the Federal Reserve Bank of San Francisco.
“Immigration has traditionally provided an important contribution to the U.S. labor force,” the report said. “The flow of immigrants into the United States began to slow in 2017 due to various government policies, then declined further due to border closures in 2020-21 associated with the COVID-19 pandemic. This decline in immigration has had a notable effect on the share of immigrants in the U.S. labor force.”
Russia’s invasion of Ukraine also continues to affect agricultural production in the U.S., said Curt Covington, senior director of institutional business at AgAmerica Lending, a financial-services company providing agricultural loans. Because the war disrupted supplies of commodities like wheat and corn — also pushing up prices for those goods — farmers have been prioritizing planting those crops over vegetables.
“These escalating frozen-vegetable prices present a challenge for farmers as they grapple with increased production costs and labor pressures,” and that presents a long-term challenge for farmers, “potentially impacting their profitability,” Covington said.
All of these factors — from international supply chains to extreme weather conditions — will have an effect on the cost of frozen goods in U.S. supermarkets. Ultimately, experts said, consumers will end up paying the price.
My colleagues JP Aubry and Yimeng Yin just released an update on state and local pension plans. Their analysis compared 2023 to 2019 – the year before all the craziness began. Think of the unusual events that have occurred in the last few years: 1) the onset of COVID; 2) the subsequent COVID stimulus; 3) declining interest rates; 4) rising inflation; and then 5) rising interest rates.
Despite the volatility of asset values over this period, the 2023 funded status of state and local pension plans is about 78%, which is 5 percentage points higher than in 2019 (see Figure 1). Of course, the numbers for 2023 are estimates based on plan-by-plan projections, but these projections have an excellent track record.
While the aggregate funded ratio provides a useful measure of the public pension landscape at large, it also can obscure variations in funding at the plan level. Figure 2 separates the plans into thirds based on their current actuarial funded status. The average 2023 funded ratio for each group was 57.6% for the bottom third, 79.5% for the middle third, and 91.1% for the top third.
The major reason for the improvement in plans’ funded status is that, despite the turbulence in the economy, total annualized returns, which include interest and dividends, have risen noticeably for almost all major asset class indexes over the 2019-2023 period (see Figure 3). The exception over this short and volatile period is fixed-income assets, which have declined in value.
The effect of fixed income’s decline on overall portfolio performance has been modest because, since 2019, fixed income has averaged only about 20% of pension fund assets (see Figure 4).
So, things are looking a little better for state and local pensions. Yes, the funded ratios are biased upward because plans use the assumed return on their portfolios – roughly 7% – to discount promised benefits. That said, trends are important, and the trend is good.
Moreover, annual state and local benefit payments as a share of the economy are approaching their peak for two reasons. First, most pension plans do not fully index retiree benefits for inflation, which lowers the real value of benefits over time. Second, the benefit reductions for new hires – introduced in the wake of the Great Recession – have started to have an impact.
With liabilities in check and solid asset performance, maybe we can all relax a bit about the future of the state and local pension system.
This time it’s in the latest Charles Schwab Retirement Survey. Among 1,000 people surveyed, the average respondent figured he or she needed to save $1.8 million to retire. (That figure is up from $1.7 million in the same survey a year earlier.)
Touchingly, 86% also told Schwab they were either “somewhat” or “very” likely to achieve their goals.
Er, no.
If the numbers show anything, it’s that most people don’t understand math, don’t understand finance and are wildly out of touch with reality.
Some simple calculations will show that these figures are all wrong.
First, let’s start with the bad news. There is no way 86% of people should be “very” or “somewhat” confident that they are going to hit that $1.8 million target, or anything like it. Let alone that 37% think they are “very” likely to hit it.
Median retirement-account balance at the moment? Try $27,000 and change, says 401(k) giant Vanguard.
Even that’s overstating the picture. The Federal Reserve’s most recent triennial Survey of Consumer Finances says the median American household has $26,000 in total financial assets, including savings accounts, life insurance, 401(k) plan and the like. Among those aged 45 to 54, the figure is $37,000, and among those 55 to 64 it’s $47,000. How anyone thinks they are getting from there to $1.8 million by retirement age is a mystery. Magic carpets? Magic beans?
Granted, the survey is from 2019, but the intervening pandemic period won’t have changed the picture that much — in either direction.
It’s not clear from the survey whether those polled included the value of the equity in their homes. Throw that in, and the median household’s total net worth rises to $122,000. Among those aged 45 to 54 it rises to $169,000, and among those 55 to 64 to $213,000. COVID policies helped drive up average U.S. home prices by about 30%, so those figures will have risen since 2019.
But again we are not nearing $1.8 million.
Not even close.
The good news, though, is that you don’t actually need this amount or anything like it to retire.
Naturally if someone hasn’t figured life out by the time they retire, and they still think that buying yet more stuff is the route to happiness, no amount is going to be enough.
How much we’d like and how much we need are very different things.
A $1.8 million balance would buy a 65-year-old couple an immediate annuity paying a guaranteed lifetime income of $9,500 a month, or just over $110,000 a year.
The average Social Security benefit on top of that for a retired couple is just under $3,000 a month, or $36,000 a year. So in total you’d be on about $146,000 a year. What are these people planning to do in retirement?
Even with a 3% annual rise, to account for inflation risk, that annuity will pay out $83,000 a year, and that’s for a couple, not just for one person. The money continues until both of you have gone.
How much do we really need? Well, while acknowledging that each person and each person’s situation is going to be different, let’s do some simple math.
Actual seniors are living on median annual incomes of around $45,000 to $50,000, says the Federal Reserve. And most of them say they are either reasonably satisfied with retirement or actually happy. So, at least, they tell Gallup and the Employee Benefit Research Institute.
Meanwhile, a new survey from Schroders finds that the average person thinks a comfortable retirement can be had on around $5,000 a month, or $60,000 a year.
The average Social Security benefit for a retired couple is $36,000 a year. To bring that income up to $50,000 you’d need an annuity paying $14,000 a year.
Current cost in the annuities market: $225,000.
To bring that up to $60,000 the annuity would cost $385,000.
For $350,000 you can get an income of $18,000 with a 3% annual increase to deal with inflation.
For $800,000 you can double your Social Security income, bringing in another $36,000 a year — with a 3% annual increase to deal with inflation.
The cost of housing is a major component for retirees. No, someone doesn’t have to move to Iowa to be able to retire in comfort. But they can move the dial by cashing in their home in an expensive neighborhood — especially the kind of location they may have moved to for a high-paying job or the best schools — and moving somewhere cheaper. Away from coastal California or the “Acela” corridor in the Northeast, a lot of U.S. homes are really cheap.
Retirement savings generally are grossly inadequate, and many people face genuine hardship in their senior years. And, of course, pretty much everyone could use more money. On the other hand, you can retire in comfort with a lot less than $1.8 million.
This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
https://www.barrons.com/articles/yellow-stock-bankruptcy-9bd197f5
Yellow
one of the country’s largest and oldest trucking companies, has filed for bankruptcy amid mounting debt and a labor dispute with the Teamsters union.
British Columbia’s port workers have voted almost 75% in favor of a contract offer, ending weeks of turbulent job action that stopped billions of dollars’ worth of goods from being shipped in Canada
VANCOUVER, British Columbia — British Columbia’s port workers voted almost 75% in favor of a contract offer, ending weeks of turbulent job action that stopped billions of dollars’ worth of goods from being shipped in Canada.
In a statement on the International Longshore and Warehouse Union Canada website late Friday, president Rob Ashton confirmed the result. The dispute had shut down ports on Canada’s west coast last month for nearly two weeks and spurred several business groups and political leaders to call for back-to-work legislation.
Federal Labor Minister Seamus O’Regan tweeted that both the ILWU and the BC Maritime Employers Association ratified the deal, ending the dispute. O’Regan said, however, that he is directing federal officials to review the entire case to avoid a port disruption of this magnitude from happening in the future.
The employers association said in a statement that it ratified the four-year deal, which “includes increases in wages, benefits and training that recognizes the skills and efforts of B.C.’s waterfront workforce.”
The approval of the contract, which covers about 7,400 workers, comes after the union rejected a mediated settlement twice in July — once through the group’s leadership caucus, another by full membership.
SALEM, Ore. — For the first time in 72 years, Oregon motorists can grab a fuel nozzle and pump gas into their cars on their own, since a decades-old ban on self-serve gas stations has been revoked.
Gov. Tina Kotek signed a bill on Friday allowing people across the state to choose between having an attendant pump gas or doing it themselves. The law takes immediate effect.
That leaves New Jersey as the only state that prohibits motorists from pumping their own gas. A few countries also ban it, including South Africa, where attendants offer to check fluid levels and clean the windshield, with tipping expected.
“It’s about time. It’s long overdue,” said Karen Cooper, who lives in Salem, said shortly before the bill was signed.
“I’ve spent a lot of time in California,” Cooper said. “I know how to pump my own. Everybody should know how to pump their own gas.”
Kacy Willson, 32, who has lived in Oregon her whole life, said she doesn’t have much interest in pumping her own gas. She’s only tried it a few times in her life.
“It’s kind of nice to have someone do that,” she said at a Portland gas station Friday. “I don’t really leave Oregon very much, and when I do, I have to ask someone how to pump gas, and I feel weird.”
When Oregon prohibited self-service in 1951, lawmakers cited safety concerns, including motorists slipping on the slick surfaces at filling stations subject to Oregon’s notoriously rainy weather. In recent years legislators relaxed the rule and allowed rural counties to have self-serve gas available at night. Then they extended it to all hours in eastern Oregon’s sparsely populated areas, where motorists low on gas could be stranded when there’s no attendant on duty.
The COVID-19 pandemic labor shortage helped drive a renewed push to allow self-serve across the state.
“We live in a small town in a large county and can’t find employees to pump fuel,” Steve Rodgers, whose community is at the base of the snow-capped Cascade Mountains, complained to lawmakers. “We are paying top dollar and also offering insurance, paid time off and retirement benefits, and still cannot fully staff.”
Haseeb Shojai, who immigrated from Afghanistan in 2004 and owns gas stations in central Oregon’s high desert, also lamented the labor shortage and described how wildfires, with increased intensity and frequency due to climate change, are having a major effect. The state fire marshal lifted the self-serve ban during dangerous heat waves the past couple of summers.
“Wildfires have been a factor in operating our business in the summer months, when it is hard for our gas attendants to stay for long periods outside in smoke and in heat,” Shojai said. “We don’t know if we can stay open tomorrow or the next day or even next week due to the labor shortage.”
A union representing workers at grocery store fuel stations in Oregon predicted job losses and called the the law a “blatant cash grab for large corporations.”
“With over 2,000 gas stations in Oregon, laying off just one employee per location represents millions of dollars a year that giant corporations are not paying in wages, benefits and public payroll taxes,” said Sandy Humphrey, the secretary-treasurer of UFCW Local 555.
Under the new law, there can’t be more self-service pumps at a gas station than full-service ones. And prices for motorists must be the same at both types.
Still, opponents of the measure worry that it could lead to the demise of full-service pumps, depriving older adults and people with disabilities of that option.
“I have some real concerns that we are progressively getting closer and closer to eliminating Oregon’s fuel service law entirely,” Democratic state Sen. Lew Frederick said on the Senate floor in June before voting against the bill.
Brandon Venable, a service station manager, had urged lawmakers to reject the bill, saying some customers are careless and that attendants keep people safe.
“I deal with many dangerous situations daily created by people smoking, leaving their engines running, getting in and out of their vehicles creating static electricity, trying to fill up random bottles and jugs, and driving off with the pump still in the vehicle,” Venable said.
Others wonder if motorists who are now clamoring to pump their own gas might be less keen on doing so when they have to stand out in the rain, cold and snow instead of remaining in their warm, dry cars.
Republican state Sen. Tim Knopp, who leads the minority GOP caucus, downplayed safety concerns as he described being allowed to pump his own gas because he belongs to a commercial fueling cooperative.
“I have yet to light myself on fire. I have yet to cause any problems whatsoever as it relates to self-serve gas,” Knopp said during debate on the bill. “So, colleagues, let’s make New Jersey the only state in the country that has a law against self-serve gas.”
The state Senate then approved the bill on a 16-9 vote. The House earlier passed it 47-10.
New Jersey’s 1949 ban on self-service pumps remains a source of pride for some in a state where bumper stickers declare “Jersey Girls Don’t Pump Gas.”
Since New Jersey has lower gas prices than New York and Pennsylvania, many drivers from neighboring states cross the state line to fuel up.
In 2015, lawmakers proposed ending the New Jersey ban, but the measure died because of opposition from the powerful state Senate president.
___
Associated Press reporters Michael Catalini in Trenton, New Jersey, and Claire Rush in Portland, Oregon, contributed to this report.
The numbers: The U.S. added a more modest 187,000 new jobs in July, perhaps a sign the economy is cooling enough to drive inflation lower and even stave off further increases in interest rates.
Employment growth has fallen below 200,000 two months in a row for the first time since the onset of the pandemic in 2020.
The unemployment rate, meanwhile, dipped to 3.5% from 3.6%, the government said Friday.
After the report, stocks rose and bond yields fell.
Senior officials at the Federal Reserve will decide whether to raise interest rates again in September after reviewing a handful of reports on jobs, wages and inflation.
Scott Olson/Getty Images
Higher rates work to slow inflation by depressing the economy, but they also raise the risk of recession. The Fed is aiming to extinguish high inflation without triggering a downturn — what economists call a “soft landing.”
The good news? Inflation has slowed a bit faster than expected recently. Yet while the labor market appears to be cooling, a shortage of workers is keeping upward pressure on wages.
Wages rose 0.4% in July. The increase over the past 12 months was unchanged at 4.4%.
Fed officials want to see annual wage growth return to pre-pandemic levels of 3% or less.
The pace of hiring is also faster than the Fed would like. The economy probably only needs to add 100,000 jobs a month to absorb all the people entering the labor force in search of work, Fed officials said.
Key details: The increase in hiring in July was concentrated in just a handful of areas, mostly health care and social assistance.
Some 87,000 jobs — or 47% of July’s total — were created by medical providers and social programs.
Hiring also rose slightly in leisure and hospitality, finance, wholesale and government.
While the economy is still creating lots of new jobs, fewer industries are hiring. The percentage of firms adding jobs vs. the share reducing them fell close to a record low last month. That’s a sign the labor market is cooling off.
Hiring in June and May was also weaker than previously reported.
Job gains in June were reduced to 185,000 from 209,000, marking the smallest increase since the end of 2020.
The increase in employment in May was cut to 281,000 from 306,000.
Another sign of a softening labor market: The number of hours people work fell a tick to 34.3 and matched a post-pandemic low. Businesses tend to cut hours before resorting to layoffs when the economy slows.
The share of people working or looking for work, meanwhile, was unchanged at a post-pandemic high of 62.6%.
High labor-force participation can also help to reduce inflation. When more people are looking for work, companies don’t have to raise wages as much to obtain labor.
Big picture: Can the Fed really pull off a soft landing — something it’s only done once or twice since World War Two? Senior officials are increasingly convinced it’s doable.
The Fed economic staff recently dropped its forecast of a recession and a majority of Wall Street economists now say a downturn is unlikely in the next year.
The economy still isn’t out of danger, though. The Fed has raised interest rates to the highest level in a few decades and some key parts of the economy are suffering.
If progress on reducing inflation wanes and rates go even higher, the economy would be more vulnerable to a recession.
Looking ahead: “Today’s July jobs report is consistent with a soft landing in the U.S. economy,” said chief economist Gus Faucher of PNC Financial Services. “Job growth is gradually slowing to a more sustainable pace.”
“The July employment report should not change the Fed’s hawkish lean,” said Nationwide Chief Economist Kathy Bostjancic. “But officials will want to see the August employment report and the next two inflation monthly readings before deciding whether they can remain on hold or if further rate hikes are required to cool labor demand and inflationary pressures.”
Market reaction: The Dow Jones Industrial Average
DJIA
and S&P 500
SPX
were set to open higher in Friday trades. The yield on the 10-year Treasury BX:TMUBMUSD10Y fell to 4.1%.
Yellow Corp., one of the largest trucking companies in the country, shut down Sunday as it prepares to file for bankruptcy, the Wall Street Journal reported.
According to the Journal, Yellow
YELL,
alerted employees and customers Sunday that it would cease all operations by midday. The move does not come as a big surprise — Yellow has seen customers flee in recent years and a bankruptcy filing has been widely expected, with liquidation likely to follow.
Yellow did not reply to a request for confirmation or comment.
Yellow’s collapse imperils the jobs of about 30,000 people, including about 20,000 Teamsters, according to the Journal. Many of the company’s non-union workers were reportedly laid off Friday.
Yellow and the Teamsters last week were able to avert a strike. In June, management sued the union, claiming it was unnecessarily blocking restructuring plans, a charge the union denied while blaming poor management.
In 2020, Yellow received a $700 million loan from the government to stay afloat during the pandemic, but has repaid only about $230 million, government documents show. Overall, the company reportedly has about $1.5 billion in debt.
According to the Journal, Yellow’s closure should not cause many disruptions for customers, as most shifted their cargo shipment to rival companies in recent weeks.
Yellow shares have sunk 72% year to date, and have collapsed 85% over the past 12 months.
NEW YORK — Six straight days of 12-hour driving. Single digit paychecks. The complaints come from workers in vastly different industries: UPS delivery drivers and Hollywood actors and writers.
But they point to an underlying factor driving a surge of labor unrest: The cost to workers whose jobs have changed drastically as companies scramble to meet customer expectations for speed and convenience in industries transformed by technology.
The COVID-19 pandemic accelerated those changes, pushing retailers to shift online and intensifying the streaming competition among entertainment companies. Now, from the picket lines, workers are trying to give consumers a behind-the-scenes look at what it takes to produce a show that can be binged any time or get dog food delivered to their doorstep with a phone swipe.
Overworked and underpaid employees is an enduring complaint across industries — from delivery drivers to Starbucks baristas and airline pilots — where surges in consumer demand have collided with persistent labor shortages. Workers are pushing back against forced overtime, punishing schedules or company reliance on lower-paid, part-time or contract forces.
At issue for Hollywood screenwriters and actors staging their first simultaneous strikes in 40 years is the way streaming has upended entertainment economics, slashing pay and forcing showrunners to produce content faster with smaller teams.
“This seems to happen to many places when the tech companies come in. Who are we crushing? It doesn’t matter,” said Danielle Sanchez-Witzel, a screenwriter and showrunner on the negotiating team for the Writers Guild of America, whose members have been on strike since May. Earlier this month, the Screen Actors Guild–American Federation of Television and Radio Artists joined the writers’ union on the picket line.
Actors and writers have long relied on residuals, or long-term payments, for reruns and other airings of films and televisions shows. But reruns aren’t a thing on streaming services, where series and films simply land and stay with no easy way, such as box office returns or ratings, to determine their popularity.
Consequently, whatever residuals streaming companies do pay often amount to a pittance, and screenwriters have been sharing tales of receiving single digit checks.
Adam Shapiro, an actor known for the Netflix hit “Never Have I Ever,” said many actors were initially content to accept lower pay for the plethora of roles that streaming suddenly offered. But the need for a more sustainable compensation model gained urgency when it became clear streaming is not a sideshow, but rather the future of the business, he said.
“Over the past 10 years, we realized: ‘Oh, that’s now how Hollywood works. Everything is streaming,’” Shapiro said during a recent union event.
Shapiro, who has been acting for 25 years, said he agreed to a contract offering 20% of his normal rate for “Never Have I Ever” because it seemed like “a great opportunity, and it’s going to be all over the world. And it was. It really was. Unfortunately, we’re all starting to realize that if we keep doing this we’re not going to be able to pay our bills.”
Then there’s the rising use of “mini rooms,” in which a handful of writers are hired to work only during pre-production, sometimes for a series that may take a year to be greenlit, or never get picked up at all.
Sanchez-Witzel, co-creator of the recently released Netflix series “Survival of the Thickest,” said television shows traditionally hire robust writing teams for the duration of production. But Netflix refused to allow her to keep her team of five writers past pre-production, forcing round-the-clock work on rewrites with just one other writer.
“It’s not sustainable and I’ll never do that again,” she said.
Sanchez-Witzel said she was struck by the similarities between her experience and those of UPS drivers, some of whom joined the WGA for protests as they threatened their own potentially crippling strike. UPS and the Teamsters last week reached a tentative contract staving off the strike.
Jeffrey Palmerino, a full-time UPS driver near Albany, New York, said forced overtime emerged as a top issue during the pandemic as drivers coped with a crush of orders on par with the holiday season. Drivers never knew what time they would get home or if they could count on two days off each week, while 14-hour days in trucks without air conditioning became the norm.
“It was basically like Christmas on steroids for two straight years. A lot of us were forced to work six days a week, and that is not any way to live your life,” said Palmerino, a Teamsters shop steward.
Along with pay raises and air conditioning, the Teamsters won concessions that Palmerino hopes will ease overwork. UPS agreed to end forced overtime on days off and eliminate a lower-paid category of drivers who work shifts that include weekends, converting them to full-time drivers. Union members have yet to ratify the deal.
The Teamsters and labor activists hailed the tentative deal as a game-changer that would pressure other companies facing labor unrest to raise their standards. But similar outcomes are far from certain in industries lacking the sheer economic indispensability of UPS or the clout of its 340,000-member union.
Efforts to organize at Starbucks and Amazon stalled as both companies aggressively fought against unionization.
Still, labor protests will likely gain momentum following the UPS contract, said Patricia Campos-Medina, executive director of the Worker Institute at the School of Industrial and Labor Relations at Cornell University, which released a report this year that found the number of labor strikes rose 52% in 2022.
“The whole idea that consumer convenience is above everything broke down during the pandemic. We started to think, ‘I’m at home ordering, but there is actually a worker who has to go the grocery store, who has to cook this for me so that I can be comfortable,’” Campos-Medina said.
___
Associated Press video journalist Leslie Ambriz contributed from Los Angeles.
NEW YORK — Six straight days of 12-hour driving. Single digit paychecks. The complaints come from workers in vastly different industries: UPS delivery drivers and Hollywood actors and writers.
But they point to an underlying factor driving a surge of labor unrest: The cost to workers whose jobs have changed drastically as companies scramble to meet customer expectations for speed and convenience in industries transformed by technology.
The COVID-19 pandemic accelerated those changes, pushing retailers to shift online and intensifying the streaming competition among entertainment companies. Now, from the picket lines, workers are trying to give consumers a behind-the-scenes look at what it takes to produce a show that can be binged any time or get dog food delivered to their doorstep with a phone swipe.
Overworked and underpaid employees is an enduring complaint across industries — from delivery drivers to Starbucks baristas and airline pilots — where surges in consumer demand have collided with persistent labor shortages. Workers are pushing back against forced overtime, punishing schedules or company reliance on lower-paid, part-time or contract forces.
At issue for Hollywood screenwriters and actors staging their first simultaneous strikes in 40 years is the way streaming has upended entertainment economics, slashing pay and forcing showrunners to produce content faster with smaller teams.
“This seems to happen to many places when the tech companies come in. Who are we crushing? It doesn’t matter,” said Danielle Sanchez-Witzel, a screenwriter and showrunner on the negotiating team for the Writers Guild of America, whose members have been on strike since May. Earlier this month, the Screen Actors Guild–American Federation of Television and Radio Artists joined the writers’ union on the picket line.
Actors and writers have long relied on residuals, or long-term payments, for reruns and other airings of films and televisions shows. But reruns aren’t a thing on streaming services, where series and films simply land and stay with no easy way, such as box office returns or ratings, to determine their popularity.
Consequently, whatever residuals streaming companies do pay often amount to a pittance, and screenwriters have been sharing tales of receiving single digit checks.
Adam Shapiro, an actor known for the Netflix hit “Never Have I Ever,” said many actors were initially content to accept lower pay for the plethora of roles that streaming suddenly offered. But the need for a more sustainable compensation model gained urgency when it became clear streaming is not a sideshow, but rather the future of the business, he said.
“Over the past 10 years, we realized: ‘Oh, that’s now how Hollywood works. Everything is streaming,’” Shapiro said during a recent union event.
Shapiro, who has been acting for 25 years, said he agreed to a contract offering 20% of his normal rate for “Never Have I Ever” because it seemed like “a great opportunity, and it’s going to be all over the world. And it was. It really was. Unfortunately, we’re all starting to realize that if we keep doing this we’re not going to be able to pay our bills.”
Then there’s the rising use of “mini rooms,” in which a handful of writers are hired to work only during pre-production, sometimes for a series that may take a year to be greenlit, or never get picked up at all.
Sanchez-Witzel, co-creator of the recently released Netflix series “Survival of the Thickest,” said television shows traditionally hire robust writing teams for the duration of production. But Netflix refused to allow her to keep her team of five writers past pre-production, forcing round-the-clock work on rewrites with just one other writer.
“It’s not sustainable and I’ll never do that again,” she said.
Sanchez-Witzel said she was struck by the similarities between her experience and those of UPS drivers, some of whom joined the WGA for protests as they threatened their own potentially crippling strike. UPS and the Teamsters last week reached a tentative contract staving off the strike.
Jeffrey Palmerino, a full-time UPS driver near Albany, New York, said forced overtime emerged as a top issue during the pandemic as drivers coped with a crush of orders on par with the holiday season. Drivers never knew what time they would get home or if they could count on two days off each week, while 14-hour days in trucks without air conditioning became the norm.
“It was basically like Christmas on steroids for two straight years. A lot of us were forced to work six days a week, and that is not any way to live your life,” said Palmerino, a Teamsters shop steward.
Along with pay raises and air conditioning, the Teamsters won concessions that Palmerino hopes will ease overwork. UPS agreed to end forced overtime on days off and eliminate a lower-paid category of drivers who work shifts that include weekends, converting them to full-time drivers. Union members have yet to ratify the deal.
The Teamsters and labor activists hailed the tentative deal as a game-changer that would pressure other companies facing labor unrest to raise their standards. But similar outcomes are far from certain in industries lacking the sheer economic indispensability of UPS or the clout of its 340,000-member union.
Efforts to organize at Starbucks and Amazon stalled as both companies aggressively fought against unionization.
Still, labor protests will likely gain momentum following the UPS contract, said Patricia Campos-Medina, executive director of the Worker Institute at the School of Industrial and Labor Relations at Cornell University, which released a report this year that found the number of labor strikes rose 52% in 2022.
“The whole idea that consumer convenience is above everything broke down during the pandemic. We started to think, ‘I’m at home ordering, but there is actually a worker who has to go the grocery store, who has to cook this for me so that I can be comfortable,’” Campos-Medina said.
___
Associated Press video journalist Leslie Ambriz contributed from Los Angeles.
NEW YORK — Six straight days of 12-hour driving. Single digit paychecks. The complaints come from workers in vastly different industries: UPS delivery drivers and Hollywood actors and writers.
But they point to an underlying factor driving a surge of labor unrest: The cost to workers whose jobs have changed drastically as companies scramble to meet customer expectations for speed and convenience in industries transformed by technology.
The COVID-19 pandemic accelerated those changes, pushing retailers to shift online and intensifying the streaming competition among entertainment companies. Now, from the picket lines, workers are trying to give consumers a behind-the-scenes look at what it takes to produce a show that can be binged any time or get dog food delivered to their doorstep with a phone swipe.
Overworked and underpaid employees is an enduring complaint across industries — from delivery drivers to Starbucks baristas and airline pilots — where surges in consumer demand have collided with persistent labor shortages. Workers are pushing back against forced overtime, punishing schedules or company reliance on lower-paid, part-time or contract forces.
At issue for Hollywood screenwriters and actors staging their first simultaneous strikes in 40 years is the way streaming has upended entertainment economics, slashing pay and forcing showrunners to produce content faster with smaller teams.
“This seems to happen to many places when the tech companies come in. Who are we crushing? It doesn’t matter,” said Danielle Sanchez-Witzel, a screenwriter and showrunner on the negotiating team for the Writers Guild of America, whose members have been on strike since May. Earlier this month, the Screen Actors Guild–American Federation of Television and Radio Artists joined the writers’ union on the picket line.
Actors and writers have long relied on residuals, or long-term payments, for reruns and other airings of films and televisions shows. But reruns aren’t a thing on streaming services, where series and films simply land and stay with no easy way, such as box office returns or ratings, to determine their popularity.
Consequently, whatever residuals streaming companies do pay often amount to a pittance, and screenwriters have been sharing tales of receiving single digit checks.
Adam Shapiro, an actor known for the Netflix hit “Never Have I Ever,” said many actors were initially content to accept lower pay for the plethora of roles that streaming suddenly offered. But the need for a more sustainable compensation model gained urgency when it became clear streaming is not a sideshow, but rather the future of the business, he said.
“Over the past 10 years, we realized: ‘Oh, that’s now how Hollywood works. Everything is streaming,’” Shapiro said during a recent union event.
Shapiro, who has been acting for 25 years, said he agreed to a contract offering 20% of his normal rate for “Never Have I Ever” because it seemed like “a great opportunity, and it’s going to be all over the world. And it was. It really was. Unfortunately, we’re all starting to realize that if we keep doing this we’re not going to be able to pay our bills.”
Then there’s the rising use of “mini rooms,” in which a handful of writers are hired to work only during pre-production, sometimes for a series that may take a year to be greenlit, or never get picked up at all.
Sanchez-Witzel, co-creator of the recently released Netflix series “Survival of the Thickest,” said television shows traditionally hire robust writing teams for the duration of production. But Netflix refused to allow her to keep her team of five writers past pre-production, forcing round-the-clock work on rewrites with just one other writer.
“It’s not sustainable and I’ll never do that again,” she said.
Sanchez-Witzel said she was struck by the similarities between her experience and those of UPS drivers, some of whom joined the WGA for protests as they threatened their own potentially crippling strike. UPS and the Teamsters last week reached a tentative contract staving off the strike.
Jeffrey Palmerino, a full-time UPS driver near Albany, New York, said forced overtime emerged as a top issue during the pandemic as drivers coped with a crush of orders on par with the holiday season. Drivers never knew what time they would get home or if they could count on two days off each week, while 14-hour days in trucks without air conditioning became the norm.
“It was basically like Christmas on steroids for two straight years. A lot of us were forced to work six days a week, and that is not any way to live your life,” said Palmerino, a Teamsters shop steward.
Along with pay raises and air conditioning, the Teamsters won concessions that Palmerino hopes will ease overwork. UPS agreed to end forced overtime on days off and eliminate a lower-paid category of drivers who work shifts that include weekends, converting them to full-time drivers. Union members have yet to ratify the deal.
The Teamsters and labor activists hailed the tentative deal as a game-changer that would pressure other companies facing labor unrest to raise their standards. But similar outcomes are far from certain in industries lacking the sheer economic indispensability of UPS or the clout of its 340,000-member union.
Efforts to organize at Starbucks and Amazon stalled as both companies aggressively fought against unionization.
Still, labor protests will likely gain momentum following the UPS contract, said Patricia Campos-Medina, executive director of the Worker Institute at the School of Industrial and Labor Relations at Cornell University, which released a report this year that found the number of labor strikes rose 52% in 2022.
“The whole idea that consumer convenience is above everything broke down during the pandemic. We started to think, ‘I’m at home ordering, but there is actually a worker who has to go the grocery store, who has to cook this for me so that I can be comfortable,’” Campos-Medina said.
___
Associated Press video journalist Leslie Ambriz contributed from Los Angeles.
China-Founded Rivals Ramp Up War for American Shoppers
Port workers in the province of British Columbia have voted to reject a mediated contract offer meant to end a labor dispute that stopped goods moving in and out of harbors, including at Canada’s busiest port in Vancouver
FILE – Gantry cranes sit idle as a container ship is docked at port during a work stoppage, in Vancouver, British Columbia, Wednesday, July 19, 2023. Port workers in British Columbia have rejected a mediated contract offer meant to end a labor dispute that stopped goods from moving in and out of harbors, including at Canada’s busiest port in Vancouver.(Darryl Dyck/The Canadian Press via AP)
The Associated Press
VANCOUVER, British Columbia — Port workers in British Columbia have rejected a mediated contract offer meant to end a labor dispute that stopped goods from moving in and out of harbors, including at Canada’s busiest port in Vancouver.
In a letter posted on the union’s website late Friday, International Longshore and Warehouse Union Canada President Rob Ashton said workers in the province are now calling on their employers to “come to the table” and negotiate directly, instead of doing so through the BC Maritime Employers Association.
The vote to reject the contract raises the prospect of back-to-work legislation to end the uncertainty at more than 30 port terminals and other sites.
The four-year agreement between the union and maritime employers went to a vote of about 7,400 workers on Thursday and Friday, after union leaders presented the deal to local chapters on Tuesday.
The deal worked out with federal mediators had put a temporary halt to a 13-day strike that had commenced July 1, but its fate see-sawed wildly as the union leadership then rejected it and tried to go back to picket lines.
When that was deemed illegal by the Canada Industrial Relations Board, the union submitted a new 72-hour strike notice, only to withdraw it hours later.
On July 20, the union announced it was recommending the deal and would put it to a full membership vote.
Its failure will give impetus to calls for the federal government to bring in back-to-work legislation, that came earlier from industry groups and politicians, including Alberta Premier Danielle Smith.
The earlier job action was serious enough that Prime Minister Justin Trudeau convened the government’s incident response group to discuss the matter, an occurrence typically reserved for moments of national crisis.
Anheuser-Busch InBev is planning to cut jobs in the U.S. after a sharp deterioration in sales following a boycott that’s still impacting Bud Light.
The industry publication Brewbound said the company was going to cut 2% of its U.S. workforce, where it employs 19,000. The company told the publication that front-line workers, including warehouse staff and field reps, will not be impacted. The company did not specifically identify slumping Bud Light sales as the cause of the layoffs.
Bud Light sales have tumbled after the company’s ill-fated social media promotion with Dylan Mulvaney.
Citing Nielsen U.S. beer data, analysts at Bank of America said volumes at the brewer tumbled by 15.3% year-over-year in the four weeks ending July 15, compared to the 2.7% decline for the broader U.S. beer category.
Bud Light sales over that same time period skidded 29.8%, and Budweiser volumes skidded 14%. In contrast, Coors Light sales rose 17% in the last four weeks, Miller Lite volumes rose by 12.5% and Yuengling sales surged 38%.
Anheuser-Busch InBev’s U.S.-listed shares
BUD,
have dropped 2% this year. In its home market of Belgium, shares
ABI,
rose 0.6% on Thursday.
NEW YORK — UPS has reached a tentative contract agreement with its 340,000-person strong union, potentially averting a strike that threatened to disrupt logistics nationwide for businesses and households alike.
The agreement was announced Tuesday, the first day that UPS and the Teamsters had returned to the table after contentions negotiations broke down earlier this month, to talk over remaining sticking points in the largest private-sector contract in North America. Negotiators had already reached tentative agreements on a host of issues but continued to clash over pay for part-time workers who make up more than half of the UPS employees represented by the union.
The Teamsters called the agreement “historic” in a prepared statement.
Under the tentative agreement, existing full- and part-time UPS union workers will get $2.75 more per hour in 2023, and $7.50 more per hour over the length of the five-year contract. The agreement also includes a provision to increase starting pay for part-time workers, which the union had called the most at risk in the company’s workforce of being exploited. Starting pay for part-time workers will be $21 per hour, it said, up from $16.20 today. The average pay for part-timers had been $20, according to the union.
The two sides had already agreed tentatively to make Martin Luther King Jr. Day a full holiday, and ending forced overtime on drivers’ days off. Tentative agreements on safety issues had also been reached, including equipping more trucks with air conditioning. UPS agreed to add air conditioning to U.S. small delivery vehicles purchased after January 1, 2024.
UPS had also agreed to eliminate a lower-paid category of drivers who work shifts that include weekends, and convert them into regular full-time drivers.
“Together we reached a win-win-win agreement on the issues that are important to Teamsters leadership, our employees and to UPS and our customers,” Carol Tomé, UPS chief executive officer, said in a written statement. “This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong.”
Voting on the new contract begins on Aug. 3 and concludes Aug. 22.
Union members, angered by a contract they say was forced on them five years ago by union leadership, clashed with UPS over pay as profits for the delivery company soared in recent years. Union leadership was upended last year with the election of Sean O’Brien, a vocal critic of the union president who signed off on that contract, James Hoffa, the son of the famous Teamsters firebrand.
Profits at UPS have grown more than 140% since the last contract was signed as the arrival of a deadly pandemic drastically transformed the manner in which Americans get what they need.
Unionized workers argued they were the ones shouldering growth at the Atlanta company and appeared dead set on righting what they saw as a bad contract.
The 24 million packages UPS ships on an average day amounts to about a quarter of all U.S. parcel volume, according to the global shipping and logistics firm Pitney Bowes. As UPS puts it, that’s the equivalent of about 6% of nation’s gross domestic product.
The last breakdown in labor talks a quarter century ago led to a 15-day walkout by 185,000 UPS workers that crippled the company. A walkout would have had far-reaching implications this time around with millions of Americans now accustomed to online shopping and speedy delivery.
The consulting firm Anderson Economic Group said a 10-day UPS strike could have cost the U.S. economy more than $7 billion and triggered “significant and lasting harm” to small businesses, household workers and online retailers across the country.
Logistics experts had warned that all of the other shipping companies combined would not have had the capacity to handle the packages that would flow their way during any UPS work stoppage, and prices on shipping and goods would eventually increase. Customers who shop online could have faced more shipping fees and longer waits.
In recent weeks, large and small businesses worked to create contingency plans in the event of a UPS strike.
Joseph Debicella, a small business owner who runs an online site that sells bridesmaid gifts, said his company ships roughly 50% of its orders through UPS. He hasn’t used FedEx before, but created an account with the company two weeks ago as chatter over a strike picked up. He was also hearing about the negotiations from his UPS driver, who told him his deliveries were getting lighter as the July 31 deadline for a new contract neared.
Debicella, who lives in Charlotte, North Carolina, says he’s been concerned about costs since he provides free shipping to customers who spend more than $99 on the site.
Macy’s CEO Jeff Gennette told The Associated Press that the department store chain was looking at contingency plans in case of a strike and that the department store’s supply chain team was mapping out what a strike would look like and how it would affect shipping.
The deal could prevent a major logistics disruption just as retailers were in the throes of the back-to-school shopping season, the second largest sales period behind the winter holidays.
The Retail Industry Leaders Association, a national retail trade group that counts retailers like Best Buy, CVS Health and Kohl’s as members, called the tentative pact “an enormous relief to retailers, who have been navigating the possibility of a strike and the associated uncertainty for weeks.”
“We’ve learned all too well over the last several years the impact supply chain disruptions can have,” the group said in a statement. ”We’re grateful that this challenge, which would have had a price tag in the billions of dollars and a long runway for recovery, was avoided.”
Labor experts see the showdown as a demonstration of labor power at a time of low union membership in the U.S. Union, however, have grown very active this summer after a number of organized labor pushes at major companies like Starbucks.
Hollywood actors and screenwriters are picketing over pay issues. United Auto Workers are also talking about a potential strike.
“This is how it’s done!” Association of Flight Attendants-CWA President Sara Nelson said in a statement congratulating the Teamsters for the deal. “And this labor solidarity summer just got stronger.”
_______
Matt Ott contributed to this report from Washington, D.C. and Anne D’Innocenzio contributed from New York City.
Package-delivery giant United Parcel Service Inc. and the Teamsters union on Tuesday said they had reached a tentative five-year labor agreement that would boost jobs, pay and other protections, after increasingly vocal threats of a strike reignited concerns about the impact to the economy and the nation’s shipping ecosystem.
Teamster locals in the U.S. and Puerto Rico will now meet on July 31 to review and recommend the tentative deal, which will cover 340,000 workers, the Teamsters said in a release. Rank-and-file members will vote on the deal starting on Aug. 3, with the voting process running until Aug. 22.
Under the deal’s terms, current full and part-time UPS
UPS,
workers in the Teamsters union will get $2.75 more per hour this year, and $7.50 more over the course of the contract, according to a release.
Current part-timers would have their pay raised to at least $21 per hour immediately, with a 48% average total wage hike over the next five years. New part-time hires would start at $21 per hour and advance to $23 per hour, the Teamsters said.
Full-time UPS delivery drivers in the Teamsters union would see their average top pay rate rise to $49 per hour.
The deal also ends a two-tier wage system at UPS and makes Martin Luther King Day a holiday for union members. UPS will also outfit newer delivery vehicles with air conditioning and cargo ventilation. The deal also ends forced overtime on union members’ days off.
Shares of UPS were up 0.8% in afternoon trade. Shares of rival FedEx Corp.
FDX,
were up 0.5%.
Talks between UPS and the union began in April. Some Wall Street analysts expected both sides to reach a deal, despite a more hardline stance from Teamster leadership.
“Rank-and-file UPS Teamsters sacrificed everything to get this country through a pandemic and enabled UPS to reap record-setting profits,” Teamsters General President Sean O’Brien said in a statement.
“Teamster labor moves America,” he continued. “The union went into this fight committed to winning for our members. We demanded the best contract in the history of UPS, and we got it. UPS has put $30 billion in new money on the table as a direct result of these negotiations.”
UPS Chief Executive Carol Tome, in a separate statement, also praised the deal.
“This agreement continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong,” she said.