Reason 1: The $170,000 is Total Compensation, Not Just Base Pay#

The headline number isn’t just the driver’s salary. It’s a figure that includes much more. The media often just grabs the big number without explaining the details.

Here’s the breakdown of how the company and union arrived at that estimated $170,000 figure for an average full-time driver:

1. Base Hourly Pay: Top-rate full-time drivers will now initially earn $44.26 per hour**. If they work a standard 40 hours a week for 52 weeks a year, that's an annual base pay of about **$92,000. This is a good income, but it’s **$78,000 less** than the reported$170k figure.
2. Future Base Pay Increases: The base hourly pay is set to keep going up over the five years of the contract, reaching $49 per hour**. At 40 hours a week, that brings the annual base pay to around **$102,000 a year.
3. Pension Contributions: An additional amount, estimated at $23,000 per year, is contributed by the company specifically for full-time drivers’ pension plan. This is a significant benefit.
4. Health Insurance: The company provides good medical insurance for workers and their families. This is another valuable benefit package that has a high cost to the company.
5. Overtime Pay: This is a crucial component. Rates for overtime hours will now be more than $60 an hour.

When you add up the base pay (including future increases), the pension contributions, the cost of health insurance benefits, plus the potential for significant overtime pay, the company and union have estimated that the total compensation package for an average full-time driver would require a equivalent job paying $170,000 a year to match the overall value.

So, while the headline figure isn’t a driver’s take-home salary just for showing up, it represents the total value of their job package, including base pay, benefits, and potential overtime earnings.

Why You Heard So Much About It#

Both sides had reasons to talk up this success:

• The Union: They want to highlight this as a huge win for their members. It shows the power of collective bargaining and can attract more people to join the union and work in the industry, hoping for similar deals.
• UPS: Surprisingly, the company is also doing a lot of press. This negotiation provides great publicity. In tough blue-collar jobs like trucking and delivery, it’s getting harder to find and keep workers. Highlighting the strong earning potential of full-time drivers is their best tool to attract people.

The Catch: Not All Drivers Get This#

It’s important to know that most news stories don’t mention that most UPS delivery drivers are not full-time. Part-time drivers won’t receive the same level of pay or benefits.

The potential for high earnings as a full-time driver is used to motivate the part-time workforce, who often work limited hours with limited benefits and pay. They stick around hoping that one day they can become full-time and potentially earn that high figure they’ve heard about.

The Hard Work Behind the Money#

Even full-time drivers who reach that level of compensation work incredibly hard for it. To get to the estimated $170,000 package, a full-time driver needs to work a lot of overtime – potentially an average of 15 hours of overtime every single week.

Delivery drivers and truckers already work unusual and long hours. It’s common to hear reports about these jobs putting a big strain on family life and personal health. Some lower-seniority drivers have reported regularly working 12-hour days or longer for years.

White-Collar Overtime vs. Blue-Collar Overtime#

Maybe you also work a stressful job with long hours, but you don’t get paid extra for it. In professional, white-collar jobs, formal overtime pay is rare. If you work extra hours in these roles, your only “compensation” is usually just keeping your job or maybe getting a promotion down the line if you’re lucky.

There are a couple of reasons for this difference:

• Operational vs. Non-Operational Work: White-collar work is often less directly tied to immediate revenue generation. Your company doesn’t necessarily make more money just because you filed one more report. But for UPS, every extra package a driver delivers does bring in more revenue.
• Career Progression vs. Hourly Compensation: In professional office jobs, the idea is that you earn more over your career by moving into higher-level management positions. The extra hours you put in as a junior person are seen as “professional development” that pays off later. It might seem unfair, but many white-collar workers view themselves differently than those who “clock in and clock out,” so they don’t push as hard for overtime pay.

Also, under the Fair Labor Standards Act, employees in high-level management or executive roles are generally not entitled to overtime pay. Some companies even give junior white-collar employees fancy-sounding but sometimes empty titles like “sales executive” partly to boost their ego a little, but also to avoid paying them overtime legally.

This brings us to the second main reason…

Reason 2: Negotiation Power#

Full-time UPS drivers earn more than many others because they have significant negotiating power. Your total compensation generally depends on three things:

1. How well you (or a group like a union) can negotiate.
2. How much money you help the company make.
3. How hard it is to replace you.

If you feel you’re not making as much as a UPS driver, it’s likely because you’re not maximizing one or more of these three factors in your own situation.

UPS employees, on average, contribute significantly to the company’s success. Across the 220 countries and territories where it operates, UPS generates about $191,000 in top-line revenue per employee per year. While UPS doesn’t release numbers just for the U.S., it’s likely higher here due to the large size of the market and strong demand for e-commerce, which companies like UPS deliver.

A company can’t pay its employees more than the revenue they help bring in (after covering overhead and needing profit). UPS’s revenue per worker isn’t the highest compared to all large companies (Walmart, for example, had revenues of $260,000 per employee in 2022, but they also have lots of physical stores, inventory costs, and big marketing budgets), but it’s strong enough to support higher pay.

You Probably Need to Get Better at Negotiating#

Let’s be honest, most people aren’t great at asking for more money.

• A survey by Robert Half found that only 54% of professionals actually negotiated a higher salary with their most recent job offer.
• That same survey showed 66% of men asked for more, but only 46% of women did.
• A more recent Pew Research study looking at both white-collar and blue-collar workers found that only 30% negotiated their pay when they took their current job.

This is despite the fact that 9 out of 10 employees are open to negotiating, and 85% of those who did ask for a raise were successful!

If you don’t actively look for better offers or consider moving jobs, your current employer probably won’t just keep your wages competitive on their own. Right now, in many companies, new hires are actually making more than employees who have been there for a while because companies only pay competitive rates to attract new talent.

UPS drivers had a huge advantage here: they negotiated their pay collectively through the Teamsters, one of the most powerful unions in the country. But even if you’re on your own, if you can make yourself hard to replace (which is the third reason), you can gain significant negotiating power too.

Reason 3: Hard to Replace#

This is something many people don’t get right. They don’t focus on making themselves essential and difficult to substitute.

Being a UPS driver might sound simple, but it’s a demanding job with strict requirements. Drivers have to master the company’s 340 methods. These aren’t just suggestions; they are the incredibly detailed, most efficient ways to do almost everything, down to small actions like buckling your seatbelt with your left hand while turning the ignition with your right to save precious seconds throughout the day.

This intense focus on detail (almost “neurotic attention”) helps drivers get more packages delivered per hour and drastically reduces costly mistakes like accidents or damaged cargo. A driver who is fully trained and follows these methods can deliver twice as many packages and have half as many incidents that cost the company money compared to someone untrained.

It takes a lot of time, effort, and money for UPS to train drivers on this long list of best practices. So, while it might not seem like a “high-skilled” job from the outside, a fully trained UPS driver is incredibly valuable. They generate more revenue and are much harder and more expensive to replace than someone without that specific, in-house knowledge.

Think about it: colleges churn out millions of new graduates every year for professional jobs. But a skilled UPS driver, trained in the company’s specific operating methods, has to be built internally. That knowledge is often worth more to UPS than a general business degree.

This leads into another point…

The Impact of Automation and Risk#

Ecommerce has changed the job market dramatically, cutting retail jobs but creating a lot of delivery jobs. While many other types of jobs since the 1970s have been sent overseas or automated, delivery drivers haven’t really been affected by either… yet.

Things like automated delivery drones and driverless trucks were actually a point of negotiation in the recent UPS contract. Right now, the most cost-effective way to get packages that crucial last mile to your door is still a human in a van.

However, a new driver starting a career in logistics today is taking a serious gamble. They’re betting that self-driving technology won’t make their job obsolete down the road. Companies like UPS have to compensate drivers for taking on this risk with the potential for higher pay and rewards.

So, maybe you shouldn’t rush out to get a brown uniform, but you definitely should think hard about the opportunities and risks in your own career path before you invest years of time and effort into it.

Bonus Reason: It’s Not a Glamorous Job#

Here’s a less obvious reason: People are often willing to take a significant pay cut just to have a job title that sounds impressive or prestigious.

• A 2018 survey found that 39% of employers were giving promotions without any increase in pay. That’s way up from 22% in 2011.
• Younger workers seem more open to this, with 72% of people under 34 saying they’d accept a new title that sounded more senior even without more money.

Some companies are pushing back against this trend. There’s one very large private company in America that pays its managers significantly more than the market rate – sometimes up to four times the average. But you know what? Those managers don’t get fancy corner offices, company cars, or prestigious-sounding titles. Paying well and not focusing on superficial status symbols was a key strategy in building one of the wealthiest families in America. (You can find videos explaining this strategy if you’re interested).

This suggests that people value prestige and titles so much, they’ll accept less pay. Delivery driving isn’t seen as a prestigious job, so to attract and keep good people, the pay needs to be compelling.