UPS Drivers Are the New Bankers? Also, Houses are Really Expensive

If you are on Finance Twitter (“X”), you may have seen recent memes about how much UPS Drivers make. Spoiler: It is now upward of $170k a year to be a UPS Driver.

This has sparked plenty of memes, however is that $170k all cash? We dig into what exactly makes up this newly negotiated salary for the brown shirt delivery drivers.

UPS Driver Contracts

The news about UPS Driver pay comes from the recent negotiations with the Teamsters Union. According to CNBC, the delivery giant came to an agreement with the union that allowed for up to $170k in compensation, including benefits such as healthcare and pension plans.

The deal helped avoid a strike, which would have been a painful one shutting down one of the biggest delivery services in the country. What exactly is in the contract that was negotiated, though? The Teamsters Union released a press release outlining the new contract:

• Increased hourly wage of $2.75 an hour in 2023, and up to $7.50 an hour by the end of the five year contract

• Every full-time employee makes no less than $21 an hour

• The average full-time employee will now make ~$49 an hour

• No more mandatory overtime on days off

With the above wage increases, an average UPS driver would earn about $101k each year. Including Benefits and Pension, this is where the $170k number comes in.

So, UPS drivers aren’t earning $170k a year in cash, however it still makes for a funny meme.

Housing Prices Continue to Stay High

Even though the mortgage rates are north of 7%, housing prices refuse to go down. In fact, new highs are being reached:

What does the above stat mean? Essentially it shows the relationship between housing prices and median househould income.

In 1986, the median house sale price was about 150% of real (net of inflation) household income. So, for easy math, if a family earned $100,000 a year in 1986, their house would cost about $150,000.

Fast forward to today, the story is a little bit different. While wages are higher today than they were in 1986, housing prices have sky-rockted. The median sales price of a home is now 560% of median household income.

If we use our same example, for a family earning $100,000 in 2023, their house would cost $560,000!

On top of all of this is the question of interest rates. Many say that interest rates were double in the 80s than they are today. And while this is true, the housing values were 5x cheaper 40 years ago. This has a huge affect on not just affordability, but the actual dollar amount of interest being paid month over month.

Where do we go from here? It is uncertain. If you don’t feel great about buying a home right now, you are not alone- 80% of Americans think right now is not a great time for a Real Estate purchase.

Rollin’ in Rolexes

We recently published an article on Money Armada on the most expensive Rolex Watches. Amazingly, some of these watches retail for more than $500,000- which is more than a home! Check out the latest article below: