Postal Workers Get a Raw Deal

Article Published in PostalMag.com

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.