What Is The True Cost Of USPS Labor?

APWU Ask The President

What is the true cost of labor? I often hear that labor costs account for 80 percent of postal expenses. Years ago you wrote an article pointing out that the costs for the bargaining unit were only 9 cents out of a 29-cent stamp.

Thank you.

Thomas, Rockford (IL) Area Local

President Burrus:
Thank you for your question and for being sufficiently involved with your union that you are able to anticipate the issues that will arise in contract negotiations. I have written on this subject on several occasions. [Assessing Postal Labor Costs (01/29/08) | News Reports Paint Misleading Picture of Postage Increase (05/14/07) | Negotiations Update (10/04/06) ]

The refrain that “80 percent of postal costs are labor” is repeated often and is used to justify calls to reduce wages and benefits.

However, the commentators who reiterate the claim often overlook several important factors:

They fail to mention that the “wages and benefits” they refer to include compensation for all postal employees — casuals, supervisors, managers, and the entire executive staff, including the postmaster general.

These pundits also disregard recent reductions in the employee complement, which lower the ratio of employee-related expenses to overall costs.

They also neglect to point out that the USPS is a service, with few costs other than the expenses associated with employees performing the service. Unlike businesses that produce goods, the USPS does not incur any costs to purchase raw material.

Observers that cite the 80 percent number often compare postal labor costs to UPS and FedEx, but that is like comparing apples to oranges. Those companies have very large air fleets, which require a major investment. By contrast, the Postal Service does not invest in airplanes or long-range vehicles; the USPS is supplied with air transportation and long-distance truck transportation through outsourcing contracts.

In fact, a close analysis reveals that the compensation packages for work-floor employees at UPS and FedEx are roughly comparable to the pay and benefits our members enjoy.

The standard for postal bargaining unit wages is “comparability” to the wages of employees performing similar work in the private sector. The law makes no reference to a percentage of total revenue, so the 80 percent figure is irrelevant.

It is important to note that the Postal Service and some senators have been promoting Senate bill 1507 again recently. An amendment to the bill would require arbitrators to consider the financial health of the USPS when they issue rulings on collective bargaining agreements.

Arbitrators have consistently considered the Postal Service’s financial situation during contract arbitrations, but making this a requirement would render the collective bargaining process subject to all-out manipulation.

And that is the intent of the amendment’s author: To place workers at a disadvantage and to give the Postal Service’s financial conditions supremacy over all other relevant considerations. For this reason, it is imperative that we prevent S. 1507 from becoming law.

4 thoughts on “What Is The True Cost Of USPS Labor?

  1. May 25, 2010
    To Any Reasonable Audience,
    “Discrimination includes firing or refusing to hire or promote an individual because of diabetes, and also includes failing to make reasonable accommodations for an individual’s diabetes.”
    It sounds pretty simple, right?
    Wrong. Unfortunately I’ve learned over the past year-and-a-half that it’s not nearly that simple if you are employed by the United States Postal Service. My name is Regina DeSarle. I’m a 26 year old Human Resources Professional and the proud daughter of John DeSarle. If you are reading this letter, you already know that my father has been a loyal employee of the Post Office for 32 years. What you don’t know is that the disrespect and thanklessness of the Post Office’s actions have demoralized a resilient man.
    For as far back as I can remember my dad has been the type of person who can crack one joke and make you laugh for a week. Also for as long as I can remember, my dad has been the dad with diabetes; the dad who never missed a game, but had to stick himself with insulin when he got home from those games. Dad’s diabetes has always been a part of our lives. Dad can’t eat pie on Thanksgiving or drink a few beers at the tailgate without feeling sick the next day. These slight alterations to “normal life” never affected his quality of life or his happiness. Did he not enjoy Thanksgiving? HECK yeah he enjoyed Thanksgiving! He just needed to do it a little different than everyone else.
    When the Post Office decided to weather the recession by switching hundreds of loyal employees to “off-shifts”, my dad asked to be considered a little differently than everyone else. He requested to remain on days, due to his disease and the negative effects an off-shift schedule can have on his body. His request has been perpetually denied, going against legal statute and common sense.
    There is something my father prides himself in and it’s something that he’s taught both me and my brother: WORK ETHIC. Don’t quit, don’t cheat, and don’t let your team down. It is obvious now that his 32 years of hard work is worth nothing in the eyes of the United States Postal Service. I went home a few weeks ago and had an honest conversation with my father about what he’s going through. He said “Regina, I’m just not happy anywhere anymore. It’s all I can think about. Why are they doing this to me??”
    My father is my role model. His personality, character, and integrity are pillars of what I strive to achieve in my own life. This man who has given me everything to look up to is being chipped away piece by piece by his employer. Someone in that organization needs to stand up, recognize, and take ownership for the injustice that has and is occurring so blatantly. I want my father back.

    Regina DeSarle

  2. the execuutive staff, all of the post masters that are really not needed and a postmaster general who should be thrown out of his position for doing such a bad job! and lying @ the hearings about the numbers to make the USPS look bad, when he really made himself look like a fool, but, what he didn’t say is how over paid he is and and upper management. we have 10 times more managers then we do craft employees who’s going to work the mail????

  3. Pres. Burrus states “The standard for postal bargaining unit wages is “comparability” to the wages of employees performing similar work in the private sector.” So, let’s see: at UPS the drivers get into the truck, go deliver parcels, sometime do parcel pick ups, return the truck and get out and punch off clock. Letter Carriers withdraw mail, case mail, pull down mail, load mail and parcels into vehicles, deliver letters, flats, parcels, registered/ certified/Express Mail door to door, collect mail,sometime pick up parcels from customers, return to office, unload vehicle, stow equipment, send mail to forwarding unit, punch off clock. Average UPS wages are approx $75,000/yr. Average Letter carrier wages are $55,000/yr. What’s wrong with this picture? Is there a definition of “comparibility” I’m missing?

    (909) 987-XXXX
    GUILLERMO MOJARRO Claimant-Appellant
    Case No. XXXXXXX
    Issue(s): 1256
    Date Appeal Filed: 01/12/2010
    EDO: XXXX BYB: 11/01/2009

    Date and Place of Hearing(s):
    (1) 04/12/2010 Rancho Cucamonga

    Parties Appearing:
    Claimant, Employer

    The decision in the above-captioned case appears on the following page(s).

    XXXXXXXX XXXXXXXX, Administrative Law Judge

    Case No.: XXXXXXX Inland Office of Appeals
    CLT/PET: Guillermo Mojarro
    Parties Appearing: Claimant. Employer
    Parties Appearing by Written Statement: None
    The claimant appealed from a determination disqualifying the claimant for unemployment benefits under Unemployment Insurance Code section 1256. The issue in this case is whether the claimant left the most recent employment voluntarily without good cause.
    The claimant was employed as a Distribution Clerk. Level VI, for 22 years with the above-named employer earning $52,000 per year when his employee on October 30, 2009 under the following circumstances. The claimant resigned and accepted early retirement.
    The claimant has a long, complicated history of grievances with his employer. The relevant portion of that history begins in February of 2007 when he was suspended for inappropriate conduct towards a co-employee. At the end of that brief suspension, the claimant informed the employer that he was not emotionally prepared to return to work. The claimant’s physician verified the claimant was unable to work because of his depression and anxiety. The claimant did not return to work before resigning on October 30, 2009 to accept his early retirement.
    In February of 2009n the claimant requested to be returned to work. On March 26, 2009 the employer notified the claimant in writing that he was required to provide “objective and specific medical documentation sufficient to establish that you are able to perform the essential functions of your position, with or without accommodation…” before the employer could return him to employment. In response to this directive the claimant submitted a four-paragraph correspondence from his treating psychiatrist, Dr. Harry G. Lewis. The correspondence detailed the claimant’s condition, diagnosis and prognosis.
    At the hearing the employer’s psychiatrist confirmed that this correspondence from Dr. Lewis “technically” satisfied the employer’s request for detailed medical documentation. Despite complying with the request, the employer did not return the claimant to his employment. Instead, it demanded that he submit to examination by the employer’s physicians. The claimant asserted his privacy rights and prevented the employer-appointed psychiatrist from sharing his
    opinions with the employer. The employer refused to return the claimant to his position. The impasse was not resolved until the claimant became eligible for early retirement, which he then accepted.
    In Precedent Decision P-B-37 the appeals board held that in determining whether there has been a voluntary leaving or a discharge under section 1256 of the code it must first be determined who was the moving party in the separation. If the claimant left employment while continuing work was available, the claimant was the moving party. If the employer refused to permit the claimant to continue working, although the claimant was ready, willing and able to do so, the employer was the moving party.
    An individual is disqualified for benefits if he or she has been discharged for misconduct connected with his or her most recent work. (Unemployment Insurance Code, section 1256.)
    Absence caused by illness does not constitute misconduct. (Precedent Decision P-B-216.)
    The department’s determination that the claimant was the moving party in this separation of employment is incorrect. The claimant had been out of work due to a psychiatric condition. The leave from work was approved by the employer. The claimant’s psychiatric issues were resolved according to the claimant’s treating physician, thereby opening the way for him to return to employment. The employer refused to permit the claimant to continue to work since it had not received a medical report from its own physician concerning the claimant’s medical condition. The claimant was ready willing and able to return to employment. Accordingly, the employer’s refusal to return the claimant to employment was the reason the claimant was forced to take early retirement, and thus the employer is the moving party in the separation.
    The claimant was not discharged for misconduct connected with his most recent work. The absence from work was due to psychiatric medical condition. The employer approved the leave, and appropriately demanded medical verification that the claimant was capable of returning to his employment. According to the employer-appointed psychiatrist the claimant’s treating psychiatrist’s written release “technically” complied with the employer demand. Nevertheless, the employer refused to return the claimant to work.
    The absence from work for a medical condition is not misconduct. The claimant was cleared medically by his own physician to the satisfaction of the employer’s written policy, and should have been returned to work. The employer’s refusal to return the claimant to work may have been for good cause. However, the decision not to return the claimant to his position was for reasons not amounting return the claimant to work may have been for good cause. However, the decision not to return the claimant to his position was for reasons not amounting to misconduct by the claimant. Accordingly, the claimant is not disqualified under code section 1256.
    The department’s determination is reversed. The claimant is not disqualified under code section 1256. and benefits are payable provided the claimant is otherwise eligible.

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