USPS Financial Solutions Must Include Eliminating Worksharing Discounts

Postmaster General’s Testimony Offers Little Insight

Burrus Update

The long-awaited announcement about the Postal Service’s plans regarding the dramatic decline in mail volume and revenue was presented on Jan. 28 to the Senate subcommittee with jurisdiction over postal affairs, when Postmaster General John E. Potter explained the crisis facing the USPS, and outlined management’s proposed response.

As previously reported to the APWU membership, postal volume has dropped precipitously, and, unless Congress provides legislative relief and the economy recovers, the Postal Service will become unsustainable in the near future.

In testimony before the Federal Workforce, Postal Service and the District of Columbia Subcommittee, the PMG once again cited electronic communications as a central factor in the decline of mail volume — an excuse that has run its course: Postal officials should be prohibited from offering this lame explanation ever again.

Let the record show that mail volume has not declined primarily because of electronic communication. In the 235-year history of the Postal Service, the years with the highest volume were 2005, 2006, and 2007, with 2006 being the highest. Didn’t the Internet and e-mail communication exist during those years? The facts indicate that they are not the principal causes of the steep decline of mail volume at this time.

Certainly, if these modes of communication had not been invented, postal volume would have expanded significantly more than it did, but the same can be said of the development of the telegraph, the telephone, and the fax machine.

The cause of the Postal Service’s current crisis is simple: “It’s the economy, stupid.”

Legislative Relief

The PMG’s testimony was intended to lay the foundation for an appeal to Congress for relief from the “crippling cost burden imposed by ‘Postal Reform legislation’ requiring that we prefund the employer premium for the health benefits of future retirees.” The Postal Accountability and Enhancement Act of 2006 requires the pre-funding of this liability through annual payments ranging from $5.4 billion to $5.8 billion over the 10-year period from 2007 through 2016.

Potter warned that without near-term relief from this stifling obligation, the United States Postal Service will be unable to survive in its present form.

I concur with the PMG’s conclusion that achieving relief from the unfunded healthcare liability is crucial to the survival of the Postal Service. Amending the Postal Accountability and Enhancement Act in order to reduce the USPS payments for retiree healthcare is essential. Unfortunately, this aspect of Potter’s testimony received scant attention from the press.

The options are to include this legislative relief in the stimulus bill currently being considered by Congress, or through separate legislation. Each alternative presents problems, but we must find a way to see that it is provided. The Postal Service must have time to develop long-term solutions to the serious financial deficits.

The solutions must include the elimination of “worksharing” discounts and contracts that duplicate work performed by postal employees.

A recent announcement by Pitney Bowes demonstrates how excessive worksharing discounts deprive the USPS of needed revenue. The mailing industry powerhouse, which “pre-sorts” mail that is ultimately given to the Postal Service for delivery, has opened a new mail facility in Corona, CA, which is expected to process 750 million pieces of mail annually. The 84,000 square-foot worksharing facility will employ approximately 100 workers. Clearly, Pitney Bowes believes worksharing will be profitable for them, but what about for the USPS? The plant will duplicate work that could be performed by postal employees in facilities that already exist.


Beyond relief from the obligation to pre-fund the retiree healthcare liability, the platitudes in Potter’s testimony revealed little about plans that have a chance of preventing a disaster. The PMG boasted of work-hour reductions that have paralleled the unprecedented deficits. But the crisis persists despite this massive decline in work hours, so it’s clear that disrupting the lives of hundreds of thousands of employees is not a solution to the Postal Service’s fiscal woes.

The other initiative under consideration is the possibility of a reduction in the number of delivery days from six per week to five. This proposal is the first cousin to work-hour reduction schemes, and if adopted, would not arrest the financial slide. The impact on APWU-represented employees would be to eliminate the possibility of moving to letter-carrier vacancies when our members are identified as “excess.” If mail processing also is curtailed for a day, a proportional reduction in APWU-represented assignments also would occur.

The American public would lose one day of mail service, which would stretch to three days when the additional day is combined with Sunday and a Monday holiday. Such delays will drive essential mail to private carriers, who will continue to deliver seven days a week.


The reduction of the employee complement through layoffs was not presented to the congressional subcommittee by the Postmaster General and does not appear to be under consideration at this time.

Contractual protections against layoffs require management to engage in a detailed process that includes severance pay for employees who volunteer to retire early. These requirements would make it extremely expensive to layoff employees, so, while layoffs were feared, this possibility no longer seems to represent a threat.

But the elimination of layoffs as a near-term option offers very little reassurance to the remaining part-time employees and those on light duty. The hours of these employees are being reduced to a level that is tantamount to a layoff. Area and District managers have issued orders to limit the hours of these employees to levels that cannot support a family — or an individual. The contractual limits on the use of casual employees to the detriment of PTFs or light-duty employees should be strictly enforced.

I find great comfort in knowing that the PTFs who were converted to full time as a component of the 2006 Collective Bargaining Agreement now enjoy the eight-hour guarantee, and are not suffering a serious reduction in their work hours.

The Postmaster General’s testimony has removed the cloud of impending layoffs, but it offered little comfort that there are realistic plans to reduce the impact of the current crisis on postal employees and the Postal Service as a whole.

William Burrus