Are the USPS’ Labor Agreements Realistic?

It doesn’t take a financial expert to look at recent Postal Service volume and revenue reports (like the one for April – see page 5) to realize the agency’s already tenuous business situation isn’t improving – to say the least.  Volume and revenue are continuing to recede to levels not seen in decades, and all trend lines are supporting expectations of more of the same for the foreseeable future.

First-Class Mail, historically the source of most USPS revenue, and especially retail (single-piece rate) volume, is shrinking more every month as Americans increasingly send messages and bill payments electronically rather than in hard copy form.  Given the class’ pre-eminence as a USPS revenue source, the financial impact of this trend is significant.  Meanwhile, Standard Mail volume is shaky, with some months better than others, but most lower than comparable periods in prior years.  Here, too, and in Periodicals, the same trend toward digital messages is having its effect.

And package volume – the current life raft for USPS finances – is by no means a reliable foundation on which to build the future of the Postal Service.  The loss of key business, from Amazon, for example, or diversion to competitors like UPS and FedEx, is not inconceivable, and would be a disabling blow to the agency’s already perilous financial condition.

Back to the future

Given this context, therefore, it’s hard to understand why the agreements being struck by the USPS and its labor unions seem to reflect a belief that it’s still the high times of the 1980s, or that those heady days of growth and prosperity will return.

Take the recently-concluded contract negotiations with the National Association of Letter Carriers (the city carriers’ union), for example.  Like other contracts agreed upon in the past, it includes raises, cost-of-living-adjustments, conversion of more part-time workers to career status, and continuation of distinctive protections like the no-layoff clause.

In its announcement of the agreement, the union praised the pact for:

“… rewarding all letter carriers for their contributions to the Postal Service’s extraordinary comeback following the Great Recession; narrowing the compensation gap between city carrier assistants (CCAs) and career letter carriers; … and preserving the core achievements of our bargaining history, including regular general wage increases and cost-of-living adjustments (COLAs), protections against outsourcing and layoffs, as well as other contractual elements that define our standard of living.”

As they perhaps should be, the union’s executives clearly were pleased that, despite the Postal Service’s increasingly dire financial condition, it was still possible to persuade the USPS to improve on past contracts.  Although what the NALC got wasn’t absurd, it’s still the source of added cost to the Postal Service and, to some observers, and in the context of the times, it’s more than just a little inappropriate.

To be fair to the NALC, their contract is just an example; the other unions’ contracts had comparable elements – raises, COLAs, conversions to career status, and – of course – the unions’ Holy Grail, the no-layoff clause.  So, unfortunately, what the city carriers got is typical, not unique.

Alternative reality

But all of those agreements beg the question: What were the negotiators thinking?  What financial and volume data were they seeing?  Did they see positive trends, growing business, and increasing fiscal stability?  Did they just look at the relatively better operating revenue figures, and not beyond to the net losses that are the real bottom line?

Are the unions so fixated on maintaining their members’ “standard of living” to be blind (or indifferent) to the simple fact that that standard is imperiled – not by USPS management or mailers, but by circumstances beyond anyone’s control?  Are the unions’ leaders just giving members more of the same Kool-Aid to get themselves re-elected?  Do the unions think they can continue forever asking for more, and defending the no longer defensible no-layoff privilege, as if the Golden Goose will live forever?  Clearly they’re not acknowledging the inevitable reality that’s going to hit them square in the face, and they’re heading toward that wall at full speed.

Of course, it takes two to negotiate, and the unions’ contract provisions were agreed to by the USPS so, while it may be fair to chide the unions for their intemperate demands, it’s equally fair to ask what the postal negotiators were thinking.  Do they believe that granting concessions to the unions can go on forever, as if the bill for those concessions will never come due?  Surely they are cognizant of the agency’s situation, can see declining volume and revenue, and know that it’s time to retreat from the generosity of the 1980s.  Have labor negotiations become such a comfortable routine that no-one at L’Enfant Plaza is interested in rocking the boat, or breaking the pattern set over the past decades?

Yes, rebuffing union demands in contract talks usually results in arbitrated agreements that favor the unions (arbiters seem no better students of USPS economic reality than the unions) but that doesn’t alter the need to reflect reality – or to try.

Isn’t it time to show and demand restraint?

Is it just politics?

Being in DC, where politics is everything, the USPS is naturally at a disadvantage.  Hamstrung as a federal entity from having or using any political leverage, it knows too well that its labor unions have spent generously to develop a network of allies in Congress who can be leveraged to ensure the Postal Service is pushed by legislators in the direction the unions want.

Consequently, perhaps the agency thinks it’s best to not push too hard in contract talks; winning at the negotiating table may result in losing in Congress.  Therefore, does the USPS see giving raises, converting more temporary workers to career positions, and perpetuating the no-layoff clause as the price for assuaging the unions and their pals in Congress?

In the long run, of course, either side’s motives, and whether the union’s demands or the Postal Service’s concessions are more irresponsible, all may be irrelevant because, regardless, it’s ratepayers who will foot the bill for what the negotiators (or arbiters) prescribe.  What the unions and the USPS don’t seem to realize, though, it that ratepayers are tired of it all, so the pattern the negotiators keep repeating means both the agency and its employees are who ultimately will suffer. – LR

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