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Year in Review: 1997

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Re-rank the list of top news stories of 1997

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Princess Diana's death stuns the world

Weld steps out -
Cellucci steps forward

Mother Teresa is laid
to rest at age 87

Chinese rule returns
to Hong Kong

Supreme Court strikes
down 'Net decency act

UPS strike disrupts thousands of firms

Heaven's Gate cult commits mass suicide

Mars Pathfinder explores Red Planet

Ellen comes out, marking a first in TV

For the first time, a mammal is cloned


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Teamsters' victory seen as watershed

Economists say union win puts other workers in a better bargaining position

By Charles Stein, Globe Staff, 08/20/97

Don't expect a raise tomorrow. But labor's victory in the strike against United Parcel Service of America Inc. suggests American workers are now in a better bargaining position -- whether they belong to a union or not.

''The pendulum is shifting toward labor, which is probably good, because workers haven't participated in the country's prosperity,'' said Allen Sinai, chief economist at Primark Decision Economics, a forecasting firm based in Waltham.

Striking Teamsters got virtually everything they asked for: higher wages, more full-time jobs, and control over their pension plan. Equally important, say analysts, was the victory the strikers won in the court of public and political opinion.

Polls showed a majority of Americans sided with the strikers, even though the UPS drivers already earned better pay and had better benefits than many workers. ''The issues in this strike resonated with people,'' said Nicholas Perna, chief economist at Fleet Financial Group.

On the political front, the Clinton administration officially took a neutral position. Yet in her comments yesterday about the outcome of the strike, Labor Secretary Alexis M. Herman made it clear where her sympathies were. ''I think this agreement becomes a model for other companies today, as we look at the question not only of good wages but also health benefits and retirement security for workers,'' she said.

For corporate America, the strike's outcome is more sobering. After years of holding the upper hand, business will have to share the wealth with employees. That could mean either lower profits or higher prices. Either choice could make life difficult for the stock market, which has risen to record heights on the strength of soaring profits and low inflation.

''This is a watershed event,'' said David Jones, chief economist at the Wall Street firm of Aubrey G. Lanston.

Wall Street clearly was not worried about the UPS strike yesterday. The Dow Jones industrial average climbed 114.74 to close at 7918.10. Investors apparently were heartened by the Federal Reserve's decision yesterday not to hike interest rates.

If the pendulum is shifting, it comes after a long period in which it swung in management's direction. Over the past 15 years, American workers have had to contend with a long list of hostile forces. Foreign competition, new technology, deregulation of key industries, and corporate downsizing have all made it more difficult for workers to win a bigger share of the economic pie.

The new competitive forces kept wages and benefits in check. At the same time, they created a greater sense of economic insecurity. Common sense dictates that when workers fear for their jobs, they are not going to be demanding big raises or enhanced benefits.

On the corporate side, the 1990s have been years of unparalleled success. Corporate profits have been rising at a double-digit clip. As a share of national income, profits have climbed from just over 8 percent to nearly 12 percent since 1991, according to Regional Financial Associates, a Pennsylvania forecasting company.

Symbolically, the incredible wealth accumulated by chief executives has delivered the same message: The rewards of the economic expansion have not been equally shared.

While no one expects that to change dramatically, the UPS strike may signal a subtle tilt in the other direction. ''It is one straw in the wind,'' said Frederick Breimyer, chief economist at State Street Bank.

Breimyer and others attribute the change, in part, to a better economy. In July the nation's jobless rate dipped to 4.8 percent, a 24-year low. In some places, including Massachusetts, employers have had trouble filling jobs. Nationally, the number of workers who are voluntarily leaving their jobs has risen, according to the US Bureau of Labor Statistics.

''Workers have now been given the green light to demand more,'' says Jones of Lanston.

That may be overstating the case. The forces that have held paychecks down are not going away any time soon. Over the past year, wages and benefits rose only 2.8 percent, according to a recent government report.

The UPS strike won't make those numbers leap, say economists. But it may signal a change in direction. Said Sinai, the Primark economist: ''The balance of power is shifting toward labor and away from corporations.''


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