“A couple years ago, the Teamsters demanded more pay from UPS. It seemed like UPS could easily afford it. The company made almost $13 billion in 2021.<\/p>\n\n\n\n
UPS used some of that money to hire more union workers. Then it offered them raises.<\/p>\n\n\n\n
But Teamster boss Sean O’Brien wanted more. He threatened a strike.<\/p>\n\n\n\n
UPS gave in…<\/p>\n\n\n\n
Today, full-time drivers make $170,000 a year.<\/p>\n\n\n\n
Good for them\u2014for those who still have jobs.<\/p>\n\n\n\n
But paying for the new Teamster contract meant UPS wasn’t as competitive as before. It raised some prices and lost business to other shippers.<\/p>\n\n\n\n
Profit dropped.<\/p>\n\n\n\n
In 2024, UPS laid off 12,000 workers. The next year, 20,000.<\/p>\n\n\n\n
It wasn’t just the wage hikes; it’s also the work rules.<\/p>\n\n\n\n
The Teamsters agreement includes hundreds of pages\u2014limits on subcontracting, bans on employees working long hours, etc\u2026.many of which made it hard for a company to adapt and cut costs.<\/p>\n\n\n\n
“These headline-grabbing union deals are delivering short-run sugar highs with long-run hangovers,” says Mercatus Center economist Liya Palagashvili. “UPS is just one example of this.”<\/p>\n\n\n\n
Another was Yellow Corp\u2014once one of the largest freight carriers in America.<\/p>\n\n\n\n
Then the Teamsters threatened to strike, demanding faster payments of health care and pension benefits.<\/p>\n\n\n\n
The company warned that a strike could bankrupt it.<\/p>\n\n\n\n
But O’Brien kept pushing, saying, “The company has two more days to fulfill its obligations, or we will strike. Teamsters at Yellow are furious and ready to act!”<\/p>\n\n\n\n
Yellow gave in. The strike was averted.<\/p>\n\n\n\n
Days later, the trucking company shut down for good.<\/p>\n\n\n\n
Thirty thousand people lost their jobs.<\/p>\n\n\n\n
…” [Yellow Corp] was having a lot of financial issues. But if you’re on the verge of collapse, the last thing you need is a Teamsters Labor Union contract that says you have to increase labor costs.”<\/p>\n\n\n\n
…<\/p>\n\n\n\n
“The same year Yellow went bankrupt, United Auto Workers went on strike against Stellantis, the company that owns Chrysler. Stellantis gave in, giving the UAW a pay raise and promising to open a new plant.<\/p>\n\n\n\n
But then Stellantis started laying off workers: 1,340 during the strike and 2,450 more the next year.<\/p>\n\n\n\n
In 2024, the International Association of Machinists and Aerospace Workers walked off the job demanding better pay from Boeing. Boeing gave in.<\/p>\n\n\n\n
One month later, Boeing announced a 10 percent work force cut.”<\/p>\n\n\n\n
…<\/p>\n\n\n\n
“Palagashvili says, “It wasn’t trade that killed the Rust Belt. It was labor unions. Unions in the Rust Belt were striking. Companies said, ‘Higher labor costs, tons of strikes, productivity isn’t going up, we’re going to relocate,’ and they did.”<\/p>\n\n\n\n
Unions help some workers. But they hurt many more.”<\/p>\n\n\n\n