A TikTok user who says he’s a driver for UPS is seeking to set the record straight about the pay bump promised to employees after the Teamsters union, which represents about 340,000 UPS workers, threatened a major strike.
The shipping giant reached a deal with the union on July 25 that would increase the compensation of UPS Teamsters, including delivery drivers. During an earnings call, UPS CEO Carol Tomé said the average full-time driver will earn around $170,000 annually in pay and benefits by the end of the five-year contract.
That figure has triggered a lot of discussion on social media, with some questioning whether delivery drivers should be given such a high amount.
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TikTok user Skyler Lee Stutzman, who says he’s a driver for the parcel company, took to the video-sharing platform to provide a his perspective of the new contract.
“$170,000 a year is a bit of an exaggeration,” he said in a clip posted Aug. 11, which has been viewed nearly 15 million times and attracted more than 25,000 comments. “I’m going to do my best to be transparent about the wages that we make.”
Here’s what Stutzman had to say about the tentative UPS contract being voted on by union members.
Doing the math
In his current contract, Stutzman claims to make $41.51 an hour. Under the new tentative labor deal — which could be ratified once voting ends on Aug. 22 — he says his pay would increase to $44.26 an hour. He then multiplies that hourly rate by 2,080 hours (40 hours a week) to reach an annual pay of about $92,000.
Per contract terms shared by the Teamsters, full-time employees would see a wage increase of $2.75 an hour in 2023, which mirrors Stutzman’s claim. Over the length of the contract, wage increases would total $7.50 an hour.
The union says the deal would improve the average top rate for delivery drivers to $49 per hour. At that rate, working 40 hours a week would pay just shy of $102,000 annually.
“But that’s not including overtime,” Stutzman pointed out. “It’s also not the important part we’re missing here.
“One of the other things that a lot of people don’t take into consideration is our medical insurance and our pension.”
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He says UPS pays between $11 and $13 an hour toward pensions of full-time employees. If the hourly pension contribution is $12 and that’s paid out for 2,080 hours, that would come to an additional $24,960 a year in pension contributions. For its part, UPS says it contributes more than $23,000 a year to each full-time employee’s pension plan.
As for medical insurance, Stutzman doesn’t give an estimate — but a survey commissioned by the Kaiser Family Foundation found the average annual premiums for employer-sponsored health insurance in 2022 were $7,911 for single coverage and $22,463 for family coverage.
“You can quickly see that it would actually take about a $170,000 a year job to replace this one for me,” Stutzman said.
He added that, “while the media is making it a little more profound than it really is,” he acknowledges he works for an “amazing“ company.
Hunt for higher wages
The reason why Teamsters threatened to strike in the first place was to improve benefits, pay and to ax UPS’s two-tier wage system for part-time and full-time workers.
“We expected negotiations with the Teamsters to be late and loud, and they were,” Tomé said during the earnings call, adding that UPS has slashed its full-year revenue forecast “primarily to reflect the volume impact from labor negotiations and the costs associated with the tentative agreement.”
The labor deal is the “single largest private-sector collective bargaining agreement in North America,” the union said in a press release.
In the week after the tentative agreement was announced, online jobs board Indeed saw searches with the words “UPS” or “United Parcel Service” in the job title spike by more than 50%, according to data obtained by Bloomberg.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
