On Tuesday, August 22, 2023, UPS workers – specifically, members of the Teamsters union – formally voted to approve a new contract that would include significant pay raises, an end to forced overtime, and air conditioning or cooling gear installed in all trucks. (The last one was a major objective for the employees, as delivery-van interior temperatures during summer months can routinely exceed 120°F, or 48.9°C). The five-year deal, tentatively reached on July 25, definitively puts an end to a serious potential risk to the U.S. supply chain. Federal statistics suggest that UPS is responsible for shipping approximately 5% of US GDP. On a daily basis, it handles about $3.8 billion worth of goods. By the end of the contract in five years, the average UPS driver will be earning $170,000 in compensation a year, including pay and benefits.
It has been a busy year for labor action. At the time of publication, Hollywood remained shut down amidst dual strikes by the actors’ union (SAG-AFTRA) and the writers’ union (Writers Guild of America). This is the first time both unions have struck at the same time since 1960. (The head of SAG at the time was future President Ronald Reagan.)
Meanwhile, with their existing contract set to expire on September 14, 2023, employees of General Motors (GM -2.81% ), Ford (F 0.40% ), and Stellantis (STLA 0.10% ) cast votes this week on the issue of whether to authorize United Autoworkers to call strikes if negotiations fail before then. The UAW has demanded 46% pay increases, the restoration of pensions for new hires, and additional benefits. They are also seeking promises that manufacturing jobs will continue to be done by UAW members as the companies transition to electric vehicles. Assuming strikes are authorized by members, UAW could opt to target just one company or call for work stoppages at all three. The UAW represents about 146,000 workers at the three carmakers.
The Bureau of Labor Statistics reported that at the end of July, more than 201,000 Americans were on strike or work stoppage. (Note that the BLS only tracks work stoppages involving 1,000 workers or more.)
Recently, Head of Research Tom Lee wondered aloud about whether the UPS agreement – with pay increases that were bigger than expected – might affect future PPI numbers, as well as consumer and Fed expectations about inflation. That is not a question we are prepared to answer at the moment, but the number of high-profile labor-union actions this summer led some of us to wonder how the stock prices of companies affected by major labor strikes fluctuate in the months before and after the strike and its resolution.
Here are nine of the largest major labor strikes that directly targeted publicly traded U.S. companies in the past 20 years, as measured by days of work affected by the work stoppage. This is calculated by multiplying the number of workers participating in the strike by the number of days they would have worked if not on strike. Often, this does not actually reflect lost productivity at the company, as non-union workers are often brought in to help cushion or even reverse the impact to operations during such work stoppages.
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