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A 10-day UPS strike could cost the US economy $7.1 billion. That could make it the costliest work stoppage ever in US history, according to an estimate from a Michigan economic research firm that studies the costs of labor disruptions.
The estimate from Anderson Economic Group said the hit to businesses and consumers would be $4.6 billion by itself, causing “significant and lasting harm for small businesses, household workers, sole practitioners, and online retailers across the country.”
Other costs include estimated direct losses at UPS of $816 million, as well as $1.1 billion in lost wages by 340,000 members of the Teamsters union at the company. The remaining costs would be born by UPS suppliers and from lost tax revenue.
The union has said it will go on strike August 1 without an agreement on a new contract. Talks broke off last week with both sides accusing the other of walking away from the table.
The Teamsters union did not have an immediate comment on the study. It has said in the past that if there is a strike it will be the fault of the company for not stepping up and agreeing to the economic package being sought by the union despite having its earnings nearly double during the life of the current five-year contract.
UPS said that it won’t comment on third-party research and that it is still hopeful of reaching an agreement with the union to avoid a strike.
“Our focus is on negotiations rather than speculation,” said UPS spokesman Glenn Zaccara. “We remain confident that we will reach an agreement that is a win for our employees, our company and customers, and the union.”
UPS has had only one national strike in its history, a 16-day strike in 1997 by the Teamsters. But the company had 180,000 Teamster-represented employees during that strike, slightly more than half the numbers it has now, and it was far less central to the US economy, said Patrick Anderson, president of Anderson Economic Group.
“It wasn’t a tech-centric economy built around small package delivery then,” said Anderson.
Anderson said estimates of the cost of earlier strikes goes back only 100 years, and that this would be the costliest he could find in that time frame. The $7.1 billion cost estimates would nearly double the $4.2 billion total economic hit of the costliest recent strike, the 2019 strike at General Motors. And that strike lasted six weeks, not just 10 days.
He said that the cost of the strike would be limited if it only lasts a couple of days, but would increase rapidly after that.
“The damage clearly grows day by day,” he said.
Source:CNN
