Post-Patco Era Vs. Ups And The Teamsters? Labor Movement Essay, Research Paper
Running head: POST-PATCO ERA VS. UPS AND THE TEAMSTERS
Post-PATCO era vs. UPS and The Teamsters? Labor Movement
Tonya D. Moore
University of Sarasota
Abstract
Professional Air Traffic Controller Organization (PATCO) captivated Americans
in its unsuccessful struggle to win the labor movement. The exposure during that
period left a decline in any type of union struggle. In 1997, United Parcel Service,
Inc. (UPS) went on a similar movement that took a different turn for American
laborers. The results of this movement not only contributed to success for UPS
employees, but it also reversed the Teamsters? representation image among
laborers. Related history of the post-PATCO era and the Teamsters, contribute to
an awareness of the past and present outcomes of the joint venture between UPS
and the Teamsters. Political influences, outcomes, and statistics are related in the
present paper. Also, data from the Bureau of Labor Statistics (BLS) are examined
as relates to union involvement in both situations. Conclusions regarding steps that
management can take to avoid strikes are also offered, along with future research
recommendations.
Post-PATCO era vs. UPS and The Teamsters? Labor Movement
Introduction
The present status of the labor movement caused many to lose their
confidence in efforts to protect working Americans. Whether the union
representation involves the AFL-CIO, the Teamsters, national independents and
independent local unions the movement is declining.
Many events alter the way laborers? think and companies? respond. Whether
the response entailed a strike or an affiliation to a union, the choices to laborers
were not clear. Managers and politicians took the easy route leaving laborers
holding the bad end of the stick, by forcing them back to work without a contract.
The answers are not clear and the problems are not solved for the American
laborers.
Fichtenbaum and Traynor (1997) noted that, the efforts of the labor
movement are steadily declining and companies are relying more on politicians to
solve their issues. The time has come for companies and politicians to be held
accountable for their actions and let laborers control their ?rights.? A recent event
(UPS and the Teamsters? labor movement) has taken place to help companies to
understand the problems of not complying with labor movements? requests and the
loss to companies as a whole. Clearly, future diplomatic strategies need to be
implemented to prevent strikes, along with more cooperative relationships, because
the cost can become long-term expenses.
Literature Review
Before the 1980s, the average union involvement?s totaled 1,306,300
workers with an average of 275 strikes (Grimes, 1995). This total fell after the
post- Professional Air Traffic Controllers Organization (PATCO) era to an
average of 407,180 workers involved and 56 strikes. Grimes (1995), using a
regression model attempted to determine if the PATCO strike has significantly
contributed to the declining number of major strikes, but the empirical evidence
does not indicate that it has had a significant independent effect. The Reagan
Administration was one factor in the shift in labor law, supporting employers and
not organized labor in 1981. Reagan fired the employees of PATCO for illegally
striking and he decertified the Professional Air Traffic Controllers Association.
After the largest labor rally in American history, American laborers? hope was
slowly vanishing. The PATCO members risked their jobs, pensions, future rights
of employment with the US Government, possible severe individual and group
civil penalties and the heavy burden of criminal sanctions. All this with the idea
that they would make the future better for other workers.
The Clinton Administration also keyed in on issues related to workers?
rights. ?For twenty years the wages of working people have been stagnant or
declining?. For too many families, even when both parents were working, the
American dream has been slipping away. In the 1992 the American people
demanded that we change,? (Clinton declared in his State of the Union address). In
1993, wages declined an average of 1.5 percent for hourly employees and college-
educated workers. The rest of the world suffered too with temporary jobs or just
plan lay offs. The effect of the post-PATCO era took ?hope? out of the labor
movement. Meyer (1994, p.116) stated that, ?the choice to end in 1981 is due to
the heavily increased resistance to unions following the dissolution of PATCO, the
increased legal pressure on the Teamsters during the 1980s (leading to their
reaffiliations with the AFL-CIO in 1987), and the virtual demise of the
independent national union by the 1990s.? The ?hope? for labor movements
declined after this event.
In 1907, UPS began providing private messenger and delivery services in
the Seattle, Washington area. Now, UPS is the world?s largest express carrier, the
world?s largest package delivery company, and a leading global provider of
specialized transportation and logistics services. UPS delivers over 12 millions
packages and documents for 1.7 million shipping customers per day throughout the
United States and in over 200 countries. In 1998, the company reported a record of
330,000 employees that delivered more than three billion packages and documents
worldwide, generating revenues of 24.8 billion and net income of 1.7 billion.
Despite these wonderful statistics, two years ago many employees felt that job
security was an issue with a company that consumes billions of dollars off of their
sweat. Today, there are 202,000 (62%) of UPS employees that are represented by
one of the most powerful unions, the International Brotherhood of Teamsters
(IBT).
Before the1997 success, the Teamsters were not the choice of the working
people. The reputation of the Teamsters was less desirable next to the AFL-CIO
due to the higher level of expertise and resources in the AFL-CIO and the AFL-
CIO success in improving employee?s working conditions. Cooke (1983) found
that the Teamsters were also less likely to win in elections than other unions
representatives. Many people were reaffiliated with the AFL-CIO during the post-
PATCO era. ?Before General President Ron Carey took office in 1992, the union
lost an average of 40,000 members for each year since 1979? (The Teamster,
March/April 1997).
Today, the Teamsters are one of the most well known union representations
next to the AFL-CIO. The Union is made up of working men and women who
comprise 1.4 million throughout the United States, Canada and Puerto Rico.
Jimmy R. Hoffa, the leader of the Teamsters in 1957-1967, generated a goal
before his sudden disappearance, of taking over all transportation unions. In 1964,
the National Master Freight Agreement, heralded his efforts as one of the greatest
accomplishments in U.S. labor history. Hoffa, Sr. brought attention to the
Teamsters, but he was also the person who set the tone for the future UPS
strike. Wilson and Witt (1999) noted that, in 1962 Hoffa, Sr. started the shift for
lower-wage and part-time jobs for UPS. Then, in 1982, Hoffa?s old-colleagues
agreed to freeze the starting part-time wage at $8 per hour (The Teamster,
November/December 1996). Now, Jimmy P. Hoffa, the General President of the
Teamsters and the son of the Teamster?s legend, is now undoing his father?s era
and continuing to follow-up on the issues that won the UPS strike.
August 4,1997 at 12:01 a.m. was the period when the Teamsters announced
the strike against UPS. This strike changed the ?faith? in the labor movement
(Wilson and Witt, 1999). The change not only affected UPS but also it affected the
confidence in the Teamsters over the AFL-CIO. The Teamsters selection in the
UPS laborers? representation was an excellent choice, despite the factors that set
the tone in 1962 (lower wages and part-time work). Wilson and Witt (1999, p.58)
noted that, ?at a time when the American labor movement is struggling to reverse
its decline in membership and strength, the Teamsters? nine-month contract
campaign at UPS in 1997 demonstrated that the labor can rebuild its power by
involving its members, reaching out for public support, and challenging corporate
power on behalf of all working people.? This campaign not only empowered the
UPS laborers, but also other laborers from different companies who had an interest
in these issues. The no fear syndrome was contagious, then, to laborers because the
movement gave ?hope? again to Americans and what they believed to be ?justice.?
Further data will be provided here to support the theory that the UPS and
Teamsters? joint venture encouraged the labor movement to become stronger. In
examining further reports and information it will be shown that the effort did in
fact make a difference and that history (as relates to the PATCO strike) does not
always repeat itself. It is also noted here, that managers and politicians need to pay
attention to laborers and the influences that affect them. Political influences,
outcomes, variables and statistics on the effort will be examined in order to help
managers deal with future labor movements.
Materials from the United Parcel Service, Inc. 1999 Prospectus was used
here to compare financial reports. Information was also obtained from The
Teamster?s magazine (1996 and 1997). Other data was gather from the BLS (1999)
to establish whether the UPS movement changed the level of union involvement.
After the two week strike, the 185,000 members (includes 115,000 part-
timers) won all major issues. The issues included: 20,000 full-time job
opportunities for part-timers, including 10,000 new full-time jobs created from
existing part-time positions; new limits on subcontracting; the largest-ever wages
raises and major increases in pensions under the existing Teamster plans; and new
job safety protections (The Teamster, October 1997).
At the time of the strike, House Speaker Newt Gingrich attempted to use
tactics similar to those applied by Ronald Reagan during the PATCO labor
movement. The Teamster (October 1997) reported that Gingrich and other
Republican leaders wanted to retaliate against the labor movement. Some of the
attacks consisted of eliminating the 40-hour work week and letting companies
work employees without overtime pay; permitting corporations to dip into
workers? pension funds; interfering in Teamster contract negotiations; attacking
members? rights to vote for top union officers; and attacking Teamsters? right to be
heard (The Teamster, October 1997). At the time, President Clinton did not let
history repeat itself but instead ignored the demands of Gingrich by letting the
movement proceed. Ron Carey, the 1997 General President of the Teamsters,
stated that, ?We have to hold politicians accountable to working people, and not
just big corporations? (The Teamster, October 1997).
The outcome of the movement gave other laborers the will to fight with
management for their rights and define the effort as an American labor movement.
Witt and Wilson (1999, p.58) reported that, ?Twelve days into the two-week,
nationwide United Parcel Service strike in August 1997, fifty workers at the RDS
package delivery company in Cincinnati voted to join the Teamsters Union.? Witt
and Wilson also note that, ?In Washington State, 4,000 corrections officers who
had an ineffective, unaffiliated association voted to become Teamsters.? The
movement encouraged many others to either join the Teamsters or fight on behalf
of the workers at UPS. In 1997, Ron Carey emphasized that, ?All American
workers owe their thanks to the thousands of Teamsters, retirees, and family
members who made our UPS victory possible? (The Teamster, October 1997).
The issues at UPS were not different from the issues of other laborers like
the PATCO members. Since the UPS strike, other union affiliations have fought
for similar terms. In 1998 there was the UAW 651 810-742-864-2010 strike
against GM, Delphi E for health, safety and subcontracts; in 1999, the SEIU 535
strike against the American Red Cross for union busting; also in 1999, the
AFSCME 31 618-462-1896 strike against Beverly Farm for $5.35/hr pay rate
(LaborNet, 1999). The above strikes are a small sample of other union affiliations.
As a result, then, the Teamsters are not the only union representatives making a
difference when managers and politicians continue to ignore these crucial human
issues.
The victory of UPS increased the awareness of other laborers, but the effect
on union membership was surprising. In 1998, BLS (1999) reported that
union members in 1997 were at 14.1 percent and in 1998 decrease to 13.9%. Also
BLS (1999) reported that in 1983 union membership was at 20.1% decreasing an
average of 6.2% in a 15-year period in 1983. The statistics suggests that a decline,
but the causes of the decline are ill-defined at the present time.
Summary and Future Research Recommendation
Companies are often not aware of the ramifications of not addressing to
laborers? issues, instead they often choose to suffer the long term repercussion, as a
result, in the market environment and employees? spirit. Companies, such as UPS,
have learned that not trying to meet employees? needs can have negative effects on
the results of their operations. UPS depended to a significant degree on the
inability to avoid strikes and other work stoppages by their employees. As their
competitors had grown in size and strength, UPS faced permanent loss of
customers if they were unable to provide continued service. Due to not being able
to meet customer demands, their competitors became stronger and their market
share declined during that period. Consequently, the Teamsters strike resulted in a
decrease in the company?s financial and operational status. The strike resulted in a
net loss of $211 million and an operating loss of $349 million for the month of
August 1997, compared to net income of $113 million and an operating profit of
$187 million for August 1996 (Prospectus, 1999). These results suggest that
solving employees? issues in a timely-manner can have a positive effect on
employees and customers as opposed to decreasing the spirit of employees and
dividing the market with competitors.
As a manager of United Parcel Service, Inc and a past UPS striker in 1997,
it is thought that the following points are in order to maintain effective
management/employee relations.
q Publicize all events to employees, including financial reports, make
job posting available, and publicize the benefits that the company offers
to their employees,
q Cross train employees (especially if in union guidelines),
q Implement surveys and focus attention on union members? opinions,
q Work towards incorporating wage/benefit status to all workers and
publicize how increases are tabulated (according to seniority date and/or
other variables that may affect wages),
q DON?T let information become a mystery for employees and, provide the
necessary resources to help solve problems,
q Let employees know the BIG PICTURE regarding why a company does
things a particular way and be HONEST about problems, suggestions and
issues.
The above outline may or may not help to contribute to a union free
environment. But, they may also help to avoid future strikes if the company is
already operating in a union setting. Unlike the PATCO situation, the UPS
members did have an impact on the labor movement and opened the doors to
future efforts ? all of which centered on employees? needs and consideration of
these needs early on. With respect to future research efforts, the following points
seem to be in order ? which of the above ideas might have the biggest impact in
satisfying employee needs, and when, in particular, should they be delivered in
order to maximize their effects. The desired outcome, of course, should be a
harmonious employee/management relationship, where trust and dialogue can be
used to avoid such things as strikes and animosity.
Bibliography
References
Bureau of Labor Statistics. (1999). Union Members in 1998. Washington, DC:
Author.
Cooke, W.N. (January 1983). Determinants of the Outcomes of Certification
Elections. Industrial and Labor Relation Review, 36 402-414.
Chezum, B., (Winter 1997). Market Power and Price: Theory and Evidence on
Labor Unions. Eastern Economic Journal, 23 (1) 73-88.