With the introduction of R2-D2 mailboxes and the directive to remove
all clocks from Post Offices nationwide, the U.S. Postal Service has
certainly provided some lighthearted news stories of late.
But
there's a much larger news item that's been ignored -- the Postal
Service's recent contract negotiations with its labor unions. These
negotiations have an enormous impact on the financial health of the $73
billion government agency -- as well as on rank-and-file postal workers.
It's
a shame that these negotiations fly under the media's radar. By staying
out of the headlines, union leaders have avoided scrutiny as they
pursue an agenda devoted to preserving membership numbers first, a
strategy which can run counter to the interests of both the current
membership and the Postal Service itself.
Most USPS labor
contracts now include guaranteed annual raises, either in the form of a
traditional pay raise or a cost-of-living adjustment. The latest mail
handlers' contract stipulates an average annual raise of 1.1%, while
the contract of the American Postal Workers Union, which represents
clerks and support staff, includes two similarly small raises over the
four-year life of the contract.
In addition, most contracts
limit postal management's labor flexibility, meaning that workers
cannot be laid off, even if there's nothing for them to do. This labor
inflexibility also includes strict limits on the number of temporary
workers, who tend not to be union members.
USPS management has
generally obliged its unions' demands without much of a fight. But
despite the success of the postal unions in securing small but
guaranteed raises, it's actually the union leadership that benefits the
most, while postal workers get a raw deal.
Why? Because union
leaders' first priority is preserving overall membership, not securing
the best compensation for individual workers. The more members in the
union, the more clout the union leadership has, both politically and
financially.
Over the past decade, the Postal Service has made
massive investments in productivity-increasing technologies, like
automated sorters that can process up to 30,000 pieces per hour.
Meanwhile, USPS has pared its workforce only modestly. The result? The
amount spend on labor is spread thinly across an oversized workforce.
On
the bright side, the Postal Service has a tremendous attrition
opportunity, due to the demographics of its aging workforce. By hiring
fewer new workers as older ones retire, USPS can reduce its overall
labor force without layoffs. Its leadership has implemented this
strategy of "workforce attrition" to some degree already. Since
assuming office in 2001, Postmaster General John Potter has trimmed the
force by about 10 percent through voluntary retirements, with minimal
effect on service.
This strategy should be expanded, not only to
cut costs for management, but also for the sake of postal workers. More
money would be available for current employees, who would no longer
have to compete with new hires for wages. And most importantly, no one
would lose a job.
Furthermore, on average, new postal workers
"receive a 28.4% pay increase when they join the Postal Service,"
according to the President's Commission on the U.S. Postal Service. The
union leadership negotiates this premium on behalf of future workers
who are not yet union members.
If starting salaries weren't so
comparatively high for new workers, there's a good chance that pay
raises for established and experienced workers would be much higher --
and more correlated to performance -- than the tiny 1% raises
characteristic of past contracts.
Put another way, it's the
hard-working, experienced postman who subsidizes an overpaid new hire
or an inefficient worker who can't be laid off. The union leadership
enjoys the benefit of each additional member paying dues into its
coffers, regardless of their level of skill or experience.
Clearly,
the unions have pursued their top-down priorities -- preserving
membership ranks and the dues that come with them -- with remarkable
success. But with salary growth heavily restricted, current workers pay
a steep price.
A better way would involve the introduction of
both merit-based compensation for postal workers and increased labor
flexibility for management. Unions and management should together
define relevant performance metrics that could lead to better service
for postal consumers and better compensation for postal workers.
As
the latest round of contract negotiations wraps up, union members ought
to ask themselves whether their interests are being served as well as
they could be.
Robert R. Schrum is a research fellow at the Lexington Institute.
