UPS drivers are grabbing headlines across the country for being awarded salaries of 170 000 a
year for doing deliveries it sounds amazing but if this is even true it's a good news story that is
covering up a trend that has cost you dearly there is a reason these delivery drivers are making six
figures and you aren't then it all began to shift there's no correlation now between productivity
and wages folks in the middle class are in trouble record-breaking jobs both wages aren't growing as
fast as expected and many economists aren't sure we're going to see much of a pickup from here last
month the union representing 340 000 UPS employees including drivers threatened a major strike unless
the company renegotiated contracts around pay benefits and conditions the company came to
a compromise over all of these points the union wanted air conditioning in all vehicles and the
company compromised by offering air conditioning in all new vehicles that cargo area where all the
packages are kept it's pretty much like opening up a big oven and walking into it the union also
wanted clear language about drones and driverless vehicles that could take workers jobs the company
can still use new technologies but now it needs to inform workers and the union before it does and
most importantly the union wanted a significant pay raise for workers which the company did agree
to but it will come into effect over the next five years Teamsters want a very strong contract and
we want a very strong contract for ourselves and of course we want it for the future according to
data from the U.S Census Bureau wages for average Americans have been stagnant since the 1970s and
according to a bank rate survey of 2 500 Americans people need a salary of 233 thousand dollars a
year to feel financially comfortable that's more than three times the median household income
which is 71 000 a year but it is in line with the amount that the average household would be earning
if wages kept up with productivity if that did happen the 170 000 that UPS drivers negotiated
would make them below average earners like you would expect unskilled drivers to be but instead
their incredible earning power is making headlines there are three reasons why UPS drivers are making
this much money and three reasons why you are not the first reason is that the earnings of UPS
drivers have been exaggerated but not in the way that you would expect what do you mean by that the
media being the media has taken the number at face value 170 000 a year will soon earn an average of
a hundred and seventy thousand dollars a year top rate drivers for UPS will now be earning 44.26 per
hour at 40 hours a week 52 weeks in a year that is an annual pay of ninety two thousand dollars
a good income but seventy eight thousand dollars lasted than what is being reported face pay is
going to continue to increase over five years to 49 an hour which would make annual pay 102
000 a year another 23 thousand dollars has been negotiated for full-time drivers as a
contribution towards the company's pension plan the company also provides good medical insurance
to workers and their families the fourth component is rates for overtime which will now be more than
sixty dollars an hour by adding everything up the company and the union have estimated that
the average driver would need a 170 000 a year job to replace their delivery job that might be
a distinction without a difference but there is a reason you have been hearing so much about it
the union wants to broadcast this success because it is a great result for their members and it can
attract more people into the industry to join the union to negotiate for the same deal UPS workers
should be paid more and have more benefits I don't know remember going on strike wait let's talk it
out for starters all UPS Union employees should receive a 275 hour raise this year okay really
okay uh sign here UPS the company is also doing a lot of press around these negotiations because
they know it is great publicity for their company when it's getting harder to attract new workers in
difficult blue caller jobs like Trucking most of the stories don't mention that most UPS delivery
drivers are not full time and won't receive the same benefits the strong earning potential of
full-time drivers is the best tool the company has to keep its part-time Workforce happy with limited
hours limited benefits and limited pay because they are holding out for the hopes that one
day they can become a full-time driver and make the money they kept hearing about even drivers
that do make it to full time are going to work extremely hard for their money to make the 170
000 package that is getting so much press a full-time UPS driver needs to work an average of
15 hours of overtime every week delivery drivers and truckers already work unusual hours so reports
of these roles put a significant strain on family life and a healthy lifestyle are common we have
some lower seniority drivers that haven't known what it's like to work less than a 12-hour day
for years now maybe you already work overtime in a stressful job and the only difference is
that you are not getting paid any overtime for IT professional White Collar jobs rarely have
formal overtime so if you work in one of these roles the only compensation you are going to get
for putting in extra hours is keeping your job or maybe a promotion if you are lucky and there
are two reasons for this the first reason is that why color work is typically less operational the
company you work for doesn't make any additional revenue for every TPS report you file but UPS does
for every additional package delivered the second reason is that if you work a professional office
job you typically could earn more money over your career by being awarded high level management
positions the overtime you do as a junior is paid for with professional development it's
[ __ ] but most white-collar workers consider themselves better than clocking in and clocking
out for overtime so they don't fight as hard to be compensated for the hours they work under the
fair labor standards act high-level management and executive employees are not entitled to overtime
compensation to take advantage of this a lot of companies give junior level White Collar employees
phony titles like sales executive the employee gets a small ego boost and the company doesn't
have to pay overtime so it's time to learn how many Works to find out if delivery drivers earning
170 000 a year should be the new normal instead of grabbing headlines this week's lesson was
sponsored by ethos life insurance is a topic that often gets pushed aside it's a sensitive subject
but being prepared for the worst case scenarios is a smart move I've discovered a company called
ethos that simplifies the process of buying life insurance a 2022 Brookings study revealed that it
costs about three hundred and eleven thousand dollars to raise a child not even considering
College tuition having life insurance at the time of passing can ensure your children will have the
financial support to grow and live the life you envision for them traditionally life insurance
has been confusing expensive and time consuming ethos focuses on creating a seamless customer
experience with a 100 online application process by eliminating medical exams and blood tests
ethers helps people get coverage in minutes instead of weeks all it takes is answering
a few health questions online according to Investopedia each year that you delay purchasing
life insurance your premium is increasing costs by eight to ten percent it's crucial to lock in
your rate now the sooner life insurance is bought the more affordable it's likely to
be life insurance is a safety net for the worst case scenario it's not just about you it's about
protecting those you love ethos is a solution for a seamless and affordable life insurance
experience check out the link in the description below for your free life insurance quote get your
own personalized free quote today by clicking the link the second reason that full-time UPS drivers
are making more than you is because they have a lot of negotiating power because they are hard
to replace total compensation is a function of how well you or a collective body like a
union can negotiate how much money you can make the company and how hard it is to replace you
what are the remaining sticking points in this negotiation completely economics we've
got 95 percent of the contract negotiated all favorable from Members no concessions
um and UPS just is barking at rewarding the people that make them the success that they have if you
aren't making as much as a UPS driver it's simply because you aren't maximizing one or more of
these three variables UPS has strong earnings per employee with the average worker in the business
contributing 191 thousand dollars per year in top line revenue across the 220 countries and
territories it operates in the company does not release financials specifically for the American
Market but it's likely that earnings are higher for workers in America because it is a large
Market with a strong appetite for e-commerce which is fulfilled by companies like UPS a company can't
pay its employees more than it makes in top line revenue because it also has to cover overheads and
return a profit to shareholders UPS's earnings per worker are lower than most large companies because
it employs so many people Walmart another large employer had revenues per employee of two hundred
and sixty thousand dollars in 2022 but it had more overhead with thousands of large locations
inventory and higher marketing expenditure people do more thorough analysis on the fundamentals of a
company they want to invest a few thousand dollars into than they do on a company they want to build
a career with negotiating is also something you probably suck at a survey by the talent
management company Robert Half found that only 54 percent of professionals negotiated a higher
salary with their most recent employment offer 66 percent of men surveyed asked for more money and
only 46 percent of women did a more recent study by Pew research on White Collar and blue collar
workers found that only 30 percent of those surveyed negotiated their pay when accepting
their current job at the same time 9 out of 10 employees are open to negotiating salaries and 85
percent of employees who asked for a raise were successful in negotiating one if you don't seek
out more competitive offers from your current job or move jobs to get a better package a company is
unlikely to offer you anything competitive new hires are out earning season employees in most
companies in America right now because companies aren't going to keep your wages competitive unless
you make them UPS drivers had the benefit of negotiating these wages collectively through one
of the most powerful unions in America but if you are hard to replace you could have just as much
negotiating power and that's the third thing most people don't get right they don't make themselves
hard to replace driving for UPS sounds like a straightforward job but drivers are expected to
keep strict schedules and practice the 340 methods of the business these methods tell drivers the
most efficient way to do just about everything such as buckling their seat belts with their
left hand while turning the ignition with their right hand to save precious seconds after doing a
delivery a neurotic attention to detail increases deliveries per hour and reduces accidents and
damage to Cargo a driver fully trained on these methods will deliver twice as many packages and
have half as many cost incurring incidents as an untrained driver but it takes a lot of time
and money for drivers to become familiar with this long list of best practices it might not
look like high skilled work but a fully trained driver will generate more revenue and will be
harder to replace than you will be if you are hoping to get a job as a graduate professional
colleges across the country make millions of new graduates every year but a skilled UPS driver has
to be made in-house and their knowledge of the company's operating methods is worth more than
most business degrees the third reason why UPS drivers are earning six figures and you aren't is
because we can't replace them e-commerce has cut retail jobs and created delivery jobs in parallel
a lot of other jobs since the 1970s have been offshore or automated delivery drivers haven't
been affected by either yet automated delivery drones and driverless trucks were a focus of
Union negotiations but the most cost effective way to get packages delivered over the crucial last
mile is still a person in a van my concern is that AI won't be able to account for the things that a
human can I've got years of experience I know to look down the road a mile to see potential
hazards 80 000 pounds driving headlong unmanned a new driver hoping to make Logistics a long-term
career is taking a serious risk that driverless technology doesn't make them redundant and to
compensate for that risk companies such as UPS need to match that risk with the potential for
a high reward so you probably shouldn't Don the brown socks but you should make sure that you
understand the opportunities and the risks of your own career Plan before committing too much time
and effort towards it the bonus fourth reason that UPS drivers earn more than you is because it's
not a glamorous job people are willing to take a serious Financial hit just to get a job title with
prestige a 2018 survey found that 39 percent of employers give promotions without a pay raise up
from 22 percent in 2011. younger employees seem more likely to accept these deals 72 percent of
people under 34 said they would be willing to take a new title without an improved salary as long
there's a sounded more senior there are companies reversing this trend though one of the largest
private companies in America pays managers as much as four times Market rates but they don't get any
fancy offices company cars or prestigious titles go and watch my video over on how history Works
to find out how this strategy built the second richest family in America if you want to watch
these videos a day early and get articles that will never be made into videos for YouTube then
subscribe to the email newsletter compounded daily to keep on learning how money works