Labor negotiations between UPS and the Teamsters Union have come to an angry standstill, with the possibility of 340,000 UPS employees going on strike next month looming more likely than ever. Should that happen, the economic consequences will take place on a national scale.

Jadrian Wooten, a Virginia Tech professor of economics, answered questions about the circumstances that led to this impasse and what the effects could be should the strike go forward.

Q: What’s at stake if UPS workers do go on strike?

“There would be significant consequences. For some perspective, this would be the largest single-employer walkout in U.S. history. The most obvious initial impact would be a disruption to deliveries that would create an inconvenience for businesses and households. UPS delivers 19 million packages per day, which is about 25% of all packages in shipped in the U.S. That disruption could have ripple effects in the broader economy, with higher prices caused by the impact on the supply chain, or a reduction in consumer spending as a result of the uncertainty in delivery options.”

Q: What issues have led to this impasse?

“The union and UPS have already settled some of the issues around working conditions—namely, air conditioning in trucks—but the last remaining hurdle appears to be related to what can be considered fair compensation for drivers. Annual profits at UPS are about three times higher than they were pre-pandemic, and the Teamsters would like to see more of those profits trickle down to drivers.” 

Q: What other aspects of this situation should we watch closely?

“The union wants what just about every other union wants to achieve, but it’s likely not clear to many people just how important of a role UPS plays in the United States economy. UPS estimates that it moves 6% of the country’s gross domestic product in its trucks every day. Only the U.S. Postal Service moves more parcels than UPS, but they aren’t known for being incredibly efficient. FedEx and Amazon are the other two major carriers, but those three companies can’t easily pick up all of that business if UPS goes on strike.”

About Wooten 
Jadrian Wooten is collegiate associate professor with the Virginia Tech Department of Economics and is the author of Parks and Recreation and Economics. Read more about Wooten’s takeaway on the economic impact from the Canadian wildfire crisis and climate change in his Monday Morning Economist newsletter. Wooten has been featured in USA Today, Inside Higher Ed, WJLA ABC 7 Washington, D.C., and NBC News, among scores of other media outlets. Read more about him here.

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