Who's The Winner In A Strike?

Dec. 21, 2004
Nobody--except the union bosses

Now that the United Parcel Service strike is over, business deliveries are returning to normal. The U.S. Postal Service, FedEx, RPS, Airborne, DHL, and a host of other mail/package-delivery services may hold onto a little of the new business they struggled to accommodate while giant UPS was operating at a cripplingly low level. There undoubtedly will be continued posturing by Teamsters union leaders about the great gains achieved because of the solidarity of union rank-and-file members in holding out for minor changes in part-time employment rules and hanging onto their (old) pension plan--which, in the long run, may not be as good as the one the company once offered. This was a strike by union employees who make more than $50,000 a year, or nearly $1,000 per week. The strike-fund checks they received during the strike gave each of them $55 a week--or about two-hours of pay--which is probably equivalent to the dues they pay during a normal month. Lost wages for each striker amounted to about $900 per week. To simplify the calculation, let's consider a four-week strike that costs workers $3,600 apiece--or almost 8% of their annual pay. Over the five-year term of the new contract, these workers would have to receive at least 1.5% higher pay each year than they would have gotten without the strike--just to compensate for their losses during the strike. It does not appear that they received that much of an increase by going on strike. The major strike-related changes involved part-time employment issues. During the four-week strike, the regular hourly UPS workers received almost no pay. But did any of the union officials lose any pay? Are you kidding? Although company managers continued to receive their salaries, their losses will show up in the form of unrealized incentive- or stock-plan payments due to the financial impact of the strike. Moreover, the company estimates that 15,000 jobs will disappear due to business losses resulting from the strike. That estimate may be high, but quite a few workers are likely to end up in unemployment lines. UPS customers' business was disrupted, seriously so in some cases. The entire country suffered inconvenience at best and costly problems at worst. So who won? Not UPS management. Managers will incur decreases in future earnings due to sub-par performance by the company and its stock. Not customers. Many of them were financially impaired. Not the small businesses that suffered financial distress due to their inability to receive incoming materials or to ship goods. And not the UPS union employees. They are unlikely to recover their lost wages over the next five years. Throw in a few injuries due to emotions flaring into minor violence, mix with a deep-seated animosity toward "scabs" who crossed the picket lines because they needed their paychecks, and company morale, unity, and teamwork could be damaged for a long time. Wait a minute; there does seem to be one group of winners. The Teamsters officials continued to receive full pay during the strike. They got tons of publicity, bolstering their hopes of arresting the continued decline in union membership in America. Their posturing was absolutely "heroic." Now that the strike is settled, union leaders--or at least their union coffers--will receive more dues income because of agreed-upon changes in the strike settlement. Isn't that ironic? The union bosses are supposed to be working for the rank and file, but instead the rank and file is really working for them! Maybe it isn't so surprising that union membership has been falling. After all, nobody ever said the working people of America are stupid. The UPS settlement isn't the end of the story. The United Auto Workers union continues to shut down--or threaten to shut down--plants operated by General Motors Corp., whose market share has been dropping. Coincidence? I don't think so. Maybe the Japanese have a better way. When they feel a "strike" is called for, they hold a meeting, wear black armbands or other markings to register their dissatisfaction, and then go back to work to protect their jobs. Are all unions totally misguided? Probably not, but as long as the only leverage they have is to become the employers' adversary and stage work stoppages, nobody wins except the union leaders. But their days could be numbered.

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