A new three-year contract between the Teamsters and the United Parcel Service has been found in compliance with administration anti-inflation guidelines, even though wages will be raised more than 10 percent a year.
The union and UPS announced Thursday rank-and-file ratification of the new pact, which will increase wages by 32 to 40 percent over three years, assuming an inflation rate of 6 to 10 percent, well below the current rate of 13 percent annually.
The percentage gain in the UPS contract is even higher than the guideline-stretching wage settlement reached last spring by the Teamsters in their master freight agreement, which the union and industry calculated at more than 30 percent.
This is because the UPS average wage base of $9.30 an hour is lower than the master freight base of more than $9.50 an hour, making for a bigger percentage gain even though the dollars-and-cents provisions of the two contracts are the same.
Despite the percentage difference, the Council on Wage and Price Stability found the UPS contract in compliance with the guidelines because its pay rate changes were the same as those in the already-approved master freight pact and because there is a historical leader-follower relationship between the two contracts.
The master freight agreement was approved only after numerous exemptions were allowed to squeeze the pay settlement into the guidelines. Similar exemptions were allowed in the UPS contract, a company official said.
The UPS contract, which was ratified by a 3-to-1 ratio, covers 74,000 drivers and other nonsupervisory employes. It was the first nationwide agreement negotiated between the company and the union. In regional negotiations three years ago, 15 eastern states were hit by an 89-day UPS strike.
Counting cost-of-living increases as well as wage increases of $1.50 an hour over three years, the union and UPS said the new contract will provide hourly increases of $2.97 if the inflation rate averages 6 percent and $3.70 if it is 10 percent. Increased employer contributions to pension, health and welfare plans were also provided.