Major Mailers Make Billions, But Demand Postal Worker Pay Cuts

Burrus Update #14-2010, Aug. 3, 2010

In their ongoing effort to shift wealth to the richest Americans, conservatives continually attack the pay and benefits earned by average workers. Over the past 20 years, the transfer of wealth has been dramatic. Despite significant increases in productivity, workers’ real wages have declined, while salaries, bonuses, dividends and “golden parachutes” for executives have skyrocketed.

A recent glaring example was the demand that auto workers agree to lower their wages — which were established over 50 years of often turbulent struggle — purportedly to enable American automobile plants to compete with foreign car manufacturers. The most outspoken advocates of union concessions were the opponents of healthcare reform, even though the costs related to employee health insurance that are included in the price of American-made automobiles exceed wages. Evidently, those who preach “efficiency” to justify low wages are selective in demanding it in other circumstances.

This holds true for postal costs. Those who demand worker sacrifices turn a blind eye to the $10 billion in profits earned by major mailers from worksharing.

Mailers’ Alliance Attacks

Recently, the Alliance for Affordable Mail launched an attack on postal workers’ pay and benefits. The Alliance, an association of large mailers that opposes a proposed postage increase, says that workers should endure a reduction of 33.9 percent of their pay and benefits.

As the press reports unprecedented profits by corporations with virtually no job creation, the Alliance points to the competition for low-wage employment and suggests that all workers should follow suit. This is the private-sector model that the association refers to in a
motion [PDF] before the Postal Regulatory Commission, which must consider the USPS-proposed rate hike.

The Alliance demands that postal management attack employee wages and benefits to bring them in line with non-union workers, many of whom are forced to accept any employer demands simply to remain employed. In anticipation of union resistance to demands for concession bargaining, the Alliance and its supporters have pushed regressive legislation that would guarantee their preferred outcome. (The major mailers support legislation that would require arbitrators to consider the financial health of the USPS when ruling on postal contracts. Arbitrators routinely do so, but requiring it as a matter of law is intended to tip the scales in management’s favor.)

A Mythical Model

The most egregious example of this attack on craft employees is the Alliance’s comparison to a mythical private-sector model of efficiency. Do these ivory-tower executives truly believe this bull, or are they attempting to pull the biggest scam since the Bernie Madoff debacle? The citation of the efficiencies of the marketplace is no more than a myth. Have they forgotten the scandals over the Defense Department’s purchase of $500 hammers and $300 toilet seats — from the private sector?

Closer to home, we have the “workshare postage discounts” of 10.5 cents offered to the private sector to affix five-digit barcodes. The free-market ideologues would have you believe that laissez-faire capitalism will correct such abuses on its own.

Postal Pay, ‘Gives’ and ‘Takes’

Well the truth is somewhere in between. Capitalism — including the opportunity for mailers to make billions of dollars in profits at the expense of the U.S. Postal Service — is the greatest generator of effort and ideas; but adherence to a model of efficiency based solely on low pay is seriously flawed. Despite the wage disparity between union-represented postal employees and employees of mail pre-sort houses, postal employees are far more efficient and productive — and we are worth every cent of the wages and benefits we bargained for.

If our members’ wages were based on the same factors used to determine workshare discounts, their pay would be off the charts. Can you imagine a wage rate for postal employees at 10.5 cents for each five-digit barcode? As you may recall, I have made a standing offer to Postmaster General Potter to set postal wages at the discounted rate. If the USPS avoids costs of 10.5 cents when private-sector mailers apply the barcode, it makes sense that postal employees’ compensation should equal this “perfect model of efficiency.” To be competitive, I have offered to take one tenth of a cent less.

The collective bargaining process produces “gives” and “takes” from all parties. Pointing out provisions that benefit labor without acknowledging the benefits management enjoys gives a distorted picture. These ideologues overlook the fact that our contract grants the Postal Service the right to hire non-career employees at a rate of pay set by management, and to deprive these workers of any benefits whatsoever; the right to furlough unprotected employees; flexibility to modify handbooks and manuals midterm, and to subcontract craft work. These and numerous other provisions of the negotiated agreements balance the demands of management and labor. The Alliance would strip the union of the provisions benefiting the workers while leaving intact management rights that were agreed to as quid pro quo (this for that).

Collective bargaining addresses the demands of competing groups and results in agreements that all parties pledge to abide by. The suggestion that one party should agree to abrogate key features of such an agreement while the other retains its benefits demonstrates that the spokespersons for the Alliance know nothing about the process of collective bargaining.

I respectfully suggest that those who have pre-determined conclusions about the outcome of postal contract negotiations temper their expectations. In a free society, collective bargaining leads to compromises that reconcile the demands of the employer and the employees to create mutually beneficial agreements.

William Burrus