Labor Lauds Return of Brown Shirts

Customers exhale and labor cheers landmark victory as 15-day old UPS strike ends

The settlement of the United Parcel Service strike could mark a significant shift in American employee/employer relations and the possible start of widespread worker demands for higher wages.

If nothing else, the terms of the UPS deal seem to be a tremendous victory for unions in general and the Teamsters and their leader Ron Carey in particular. The strike's outstanding issues appear to have been settled largely on Teamster terms.

"For years we've been accustomed to unions giving in first," says Neil Bernstein, a labor law professor at Washington University in St. Louis. "It's been a long time since a major employer was the one to make the concessions."

The challenge now facing UPS is to restore efficiency and teamwork in its familiar brown-suited work force, while winning back the loyalty of its customers.

The relatively quick end to the strike means UPS remains financially solid. Its vast route network and cheery service are still unchallenged by upstart competitors.

But the inconvenience of the work stoppage might mean many firms are now looking for ways to diversify their shipping.

"UPS may no longer be a near monopoly," says labor economist Audrey Freedman.

At time of writing the agreement to end the 15-day old UPS walkout was still tentative.

But all indications were that Teamsters Union officials would ratify the deal.

Union negotiators won big on their key issue: conversion of part-time jobs to full-time positions. UPS agreed to create 10,000 full-time jobs over the five-year life of the proposed contract.

UPS officials also agreed to significant raises in worker pay. Part-time workers would see their wage packets increase by $4.10 an hour over five years. Full-time workers - who already make substantially more than their part-time counterparts - would get a $3.10 increase.

Labor's only concession?

UPS did not win Teamster agreement to withdraw from the union multi-employer pension plan and set up a system solely for UPS workers. About the only aspect of the proposed agreement that seemed favorable to UPS was its length - five years, as opposed to the shorter pact union officials would have preferred.

The manner of the settlement reflected the relative public strength of the two sides, say labor law experts.

Polls showed that a majority of the US public supported the union and its contention that it was fighting for the rights of part-time workers in an economy prone to heartless downsizing. The UPS position - that it was a generous employer that needed worker flexibility to deal with today's tough business environment - generated less citizen sympathy.

In addition, the Clinton administration refused the request of many businesses to invoke the Taft-Hartley Act and order the strikers back to work for a cooling-off period. Teamster unity, which was in question at the strike's beginning, remained solid throughout two-week walkout.

Given that context, UPS officials may have simply decided to give in before an extended walkout depleted cash reserves and permanently alienated customers.

Other companies that rely heavily on part-time workers should pay attention to the nature of the UPS agreement, say labor experts. Otherwise they may find themselves the target of a similar walkout.

A "lesson in this is that the part-time issue does have a lot of resonance with the public, and it raises the stakes for businesses to think creatively about handling those relationships," says David Weil, an assistant economics professor at Boston University.

What the settlement portends for the US labor movement as a whole remains unclear.

On the one hand, say experts, the UPS settlement could help organizers argue that unions are still important forces in the Information Age. With the backing of the AFL-CIO's aggressive new leader, John Sweeney, Teamsters leader Ron Carey had rhetorically elevated the strike to the most important test of labor strength in decades.

"The trade union movement will be emboldened by this," says Clete Daniel, professor of American labor history at Cornell University in Ithaca, N.Y.

But whether boldness will translate to new members is less clear. Decades of declining membership have left trade unions representing only 10 percent of the private US work force. Unions remain desperate to organize such service industries as computer software. But the competitive nature of modern business means corporations will bitterly fight organizing attempts as they struggle to match labor costs with nonunion competitors.

"This was just a glitch in the steady readjustment in the way work gets done in our economy," says Richard Rodgers, an executive-in-residence at the Georgia Institute of Technology in Atlanta.

Still, the UPS strike may mark the beginning of a period in which employees are more willing to push for higher wages, or quit rather than accept part-time work. That could mean an increase in labor costs in the economy - and a possible reignition of inflationary pressures.

Inflation nudge

Federal Reserve Board Chairman Alan Greenspan has reportedly been closely watching the UPS walkout, for instance, as he weighs the need for any anti-inflation interest-rate increases.

"If employers are pressured to move more workers [into full-time positions], a significant inflation effect will occur across the economy," judges John Challenger, Chicago-based executive vice president of the outplacement firm Challenger, Gray and Christmas Inc.

Other experts are less certain about the settlement's inflationary effect. One thing seems clear, however: businesses that rely on efficient package service are thrilled that UPS vans will soon be moving again. Many retail stores, for instance, are desperate to receive back-to-school goods.

With the strike resolved, the fall season can now be "salvaged," says Bruce Van Kleeck of the National Retail Federation.

* Staff writers Ron Scherer in New York and Shelley Donald Coolidge in Boston contributed to this report.