Under the tentative agreement, all UPS union employees would receive a $2.75-an-hour raise this year and a $7.50-an-hour pay increase over the next five years. Pay for UPS’s part-time workers, who make up about half of the workforce, would start at $21 an hour, a notable boost from the current $16.20-per-hour starting wage though less than the $25 an hour that a vocal reform group composed of Teamsters members had demanded.

Union leaders cheered the deal. “We demanded the best contract in the history of UPS, and we got it,” Teamsters General President Sean M. O’Brien said in a statement. “This contract sets a new standard in the labor movement and raises the bar for all workers.”

Carol Tomé, UPS’s chief executive, also praised the deal in a statement, saying that it “continues to reward UPS’s full- and part-time employees with industry-leading pay and benefits while retaining the flexibility we need to stay competitive, serve our customers and keep our business strong.”

But as rank-and-file workers began to digest the details, some expressed disappointment about the size of pay increases for part-time workers. Others complained that only new delivery vans would get air-conditioning units — not older vans already in service — and not until 2024.

“A lot of guys who are driving will never see an AC unit before they retire,” said Damian Kungle, a part-time UPS employee in Canton, Ohio, who makes $16.65 an hour. “I keep telling them the fact that we got it at all is a win. We moved forward on issues even if they’re not perfect yet.”

Teamsters leaders must now sell the deal to union members ahead of a vote expected to stretch until Aug. 22. But they could face a bumpy road. And if the vote fails, leaders said, the union could still strike.

“I’m part of a group of part-timers who think a $25 an hour [starting wage] is fair,” said Peter Lyngso, a warehouse employee in Chicago who makes $18 an hour. “This is physically brutal work. We’ve sacrificed so much. But, working this job, it feels like the good parts of life — like going out to dinner and taking a vacation — aren’t meant for us. I’m prepared to vote no.”

UPS workers reach tentative deal to get air conditioning in new trucks

A strike at UPS — which had been looming at midnight Monday, when the current contract expires — would pose the most significant threat to the U.S. economy of any labor action in years. UPS handles roughly a quarter of some 59 million packages shipped nationwide daily, according to the Pitney Bowes Parcel Shipping Index.

This summer already has been marked by a number of high-profile strikes, including a historic double strike paralyzing Hollywood, with 160,000 actors and 15,000 writers on picket lines. Additionally, thousands of nurses, hotel workers and university workers have gone on strike in 2023 across the nation, often seeking higher wages that have not kept up with surging inflation.

All together, some 322,000 workers have gone on strike so far this year, according to data compiled by Bloomberg Law. That’s the highest number since 2019, when a half a million workers, including tens of thousands of teachers, went on strike.

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Labor leaders have said that the UPS contract deal is also crucial to the union movement, which has shrunk by half over the past four decades, and that a strong deal could influence American workers’ future access to blue-collar jobs with middle-class pay and benefits.

The deal reached Tuesday includes the establishment of Martin Luther King Jr. Day as a paid holiday for all workers for the first time, and a ban on both driver-facing cameras in truck cabs and forced overtime on drivers’ scheduled days off.

The agreement also establishes 7,500 new full-time union positions at UPS, which the union says will provide more opportunities for part-time workers to transition to full-time jobs. By comparison, the union scored 10,000 new full-time positions when workers struck in 1997, at a time when the company was much smaller.

The agreement marks a potential victory for the White House. A strike could have endangered the economic progress the administration has been eager to celebrate, but the president has also tried boosting efforts to unionize and is determined to appear pro-worker.

“Today’s announcement moves us closer to a better deal for workers that will also add to our economic momentum,” President Biden said in a statement.

Administration officials were in frequent communication with top union and company officials as the negotiations unfolded. Celeste Drake, deputy director for labor and economy at the White House National Economic Council, served as the administration’s point person on the UPS dispute, according to two people familiar with the matter, who spoke on the condition of anonymity to describe administration deliberations. White House aides encouraged both sides to reach a deal, the people said.

Business groups had asked the White House to be prepared to intervene in the event of a strike, with the Chamber of Commerce and other top industry associations asking for Biden to use his “convening power” to resolve a strike. Some business officials had gone further in discussing whether the administration had emergency authority allowing the president to compel workers to end the strike, said two other people familiar with the matter, who spoke on the condition of anonymity to describe private talks. Yet that prospect was viewed as unlikely even by its proponents, because of Biden’s unwillingness to undercut the unions’ efforts.

“Biden would be extremely unlikely to use any authority to intervene,” said Dean Baker, an economist at the Center for Economic and Policy Research, a left-leaning think tank.

The creator economy was already exploding. Then Hollywood went on strike.

Many union members said they are waiting to see a copy of the agreement with its finer details before they take a position.

“It’s really hard to judge the significance until we see the agreement,” said Danny Arlin, a 23-year UPS tractor trailer driver near Springfield, Mass.

Negotiations had stalled for nearly three weeks in July when the parties reached an impasse over pay and benefits for the company’s more than 150,000 part-time workers who load and sort packages in warehouses. Negotiations had resumed Tuesday morning with only a week to reach a deal.

Industry experts who predicted that negotiations would drag on until the deadline now say both parties were probably negotiating in informal back channels in recent days, which is typical for negotiators, to reach this agreement.

The starting wage for part-timers is currently $16.20 an hour, which has not kept up with inflation and is similar to wages in the fast-food industry, union members say.

UPS officials repeatedly rejected the union’s claims that part-timers are underpaid, noting that part-time employees at UPS make an average of $20 an hour after their first 30 days on the job. They also receive annual raises, the same health benefits as full-time employees and pensions that are exceedingly rare for private-sector workers, UPS has said.

The consulting firm AEG estimated that a 10-day strike would have resulted in losses of more than $810 million for UPS.

When UPS last went on strike, in 1997, the company permanently lost customers and market share, and small and large businesses alike suffered.

Today, far more companies, as well as a bigger chunk of Americans’ spending, rely on delivery infrastructure to transport packages across the country within days of purchase.

If UPS drivers vote down the contract and decide to strike anyway, it will be the largest for a single employer in decades.

Winning a strong UPS contract was part of Teamsters president O’Brien’s strategy to inspire nonunion workers, such as Amazon employees, to organize with the Teamsters.

But Barry Eidlin, a sociologist at McGill University, said that without a strike, the Teamsters will have a harder time getting the public and other workers to see the contract as a victory.

“The average person is not going to know that UPS Teamsters got a great contract in a way that the average person would know if they had a strike,” Eidlin said. “That means you won’t get the same ripple effects in terms of organizing at companies such as Amazon.”

Jeff Stein contributed to this report.