News & Commentary

September 16, 2015

The United Auto Workers (UAW) Union and Fiat Chrysler have reached a tentative labor deal, the Wall Street Journal reports. Following marathon bargaining sessions that began on Sunday, the union announced that the parties had reached an agreement at a news conference last night. The deal lays out a plan for removing the company’s two-tier payment system that results in pay discrepancies between new hires and experienced co-workers who are performing the same job. Beyond seeking pay raises for its entry-level employees, the union also requested raises for veteran workers. Neither party has released the details of the agreement, which remains to be ratified through a vote of union workers at Fiat Chrysler. Although the union has been in talks with three of Detroit’s biggest automobile dealers for some time (see previous posts), it chose to hammer out the deal with Fiat Chrysler first in hopes that it will later help them obtain more favorable terms from the two other major dealers.

The New York Times reports that yesterday, following an all-night negotiating session with the school district, the striking Seattle schoolteachers announced that they have agreed on a new contract with the city’s school board. The union, the Seattle Education Association, initiated the strike last Wednesday, delaying the start of the school year. The union’s main complaints implicated the company’s failure to extend a cost-of-living wage increase in any of the last six years as well as its failure to increase funding for healthcare in the last five. A vote on the contract is expected within three days and, if it is approved, the strike will formally end.

Also according to the New York Times, some members of the General Assembly of Missouri are formulating a plan to become the 26th state to enact a “right to work policy.” If the group of Republicans backing the legislation and its business group allies prevail, the legislation will allow workers who choose to not join a union to avoid paying fees. The Governor of Missouri, Gov. Jay Nixon (D), assured union workers that he would fight for the preservation of the right to require all workers, including those who do not join the union, to pay dues and vetoed the bill. This will all come to a head today when the Republican-dominated General Assmebly is expected to try to override the veto by achieving two-thirds majorities in both chambers.

Perhaps not surprising given that the nation’s unemployment rate has dropped to a seven-year low, the Wall Street Journal reports that big retailers and delivery companies are struggling to find warehouse workers to fill temporary positions in their fulfillment centers where holiday orders are packed and shipped. In the last couple of years, big retailers such as, Wal-Mart Stores, and Target have all opened up additional warehouses and distribution centers across the country in order to to improve the delivery speed of online orders. However, the drop in unemployment has left these retailers with a shortage of workers available to preemptively stock the early holiday inventory and complete the training necessary to work in a warehouse. As a result, the starting wage for a warehouse workers has increased for the first time in years from $1.50 to about $3/hour and the wages for temporary holiday jobs at e-commerce companies are also up from an average salary range of between $9 and $11/hour to an average range of between $11 and $13.50/hour. Many third party logistics providers have also raised their hourly wages and are looking to increase staffing.

The companies that deliver these packages, including UPS, FedEx, and regional firms, are forecasted to face the same difficulties in trying to staff their regional centers for the holidays. A similar push to increase wages due to the labor shortage would complicate matters for these delivery companies, all of which are trying to keep costs manageable. UPS has announced a plan to employ 95,000 employees this year (at a base starting salary of $10.10/hour for package handlers) while still maintaining better control over its holiday costs than in previous years. While neither Amazon nor FedEx has yet disclosed its seasonal hiring plan, FedEx will likely provide more guidance on its holiday hiring plans at its earnings conference call today.

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