Chairman Darrell Issa’s Hearing Preview Statement:
Tuesday’s hearing of the House Committee on Oversight and Government Reform, entitled “Are Postal Workforce Costs Sustainable,” will continue the Committee’s ongoing effort to monitor the fiscal condition of the United States Postal Service and the affordability of USPS’s workforce compensation expenses. One pressing question remains at the forefront of congressional oversight of USPS: What is needed for the postal service to bring its operating costs in line with its declining revenues?
For the past several years, USPS has been on the brink of insolvency. Immediate structural reforms and cost-cutting measures are imperative. Labor costs comprise 80 percent of USPS’s annual budget, and the current negotiations for continued labor agreements present an opportunity to implement an effective business model for USPS and place the postal service on more solid financial footing.
Congress is keenly aware that technological advances in the communications market have left USPS behind the innovative curve. The loss of volume to electronic communication and the no layoff provisions of USPS labor contracts mean that more workers are handling less mail than a decade ago. This trend will only get worse unless comprehensive reforms are implemented.
Oversight of the postal service falls within the Committee’s constitutionally-mandated responsibility. Congress will work with USPS management to ensure the permanent viability of the postal service without the need for taxpayer bailouts or the use of budget gimmicks to hide the real crisis.
Witnesses & excerpts of Prepared Testimony
The Honorable Louis J. Giuliano,Chairman, Board of Governors United States Postal Service
The Board unanimously supports the tentative agreement.
• This tentative labor agreement achieves one of our most important operational objectives – the ability to apply work hours where and when we need them rather than deal with static work shifts and significant overtime costs.
• It also calls for an immediate twoMyear real freeze on wages.
• It allows roughly 20 percent of the APWU workforce to be temporary, at a cost 50 percent lower than our permanent employees.
• It establishes a two-tiered workforce, with a lower wage tier for new employees.
• It increases the employee contribution for healthcare.
These provisions of the tentative contract constitute a cost saving of $3.8 billion. We believe that both labor and management have demonstrated their determination to right
this ship.
The Honorable James C. Miller III,Governor.United States Postal Service
Let me say that I, too, am disappointed that we did not accomplish more in the negotiations. As everyone involved will confirm, the Postal Service bargained long and hard to achieve more. The reason we did not get more, and the reason we agreed in the end to the contract now out for ratification by the rank and file is that the current law governing our labor negotiations is biased against management and in favor of labor. More steps could be considered , wilh the goal of not just restoring the Postal Service’s financial viabi lity, but increasing the efliciency of the broader postal market. The most obvious proposal is to demonopolize and privatize the Postal Service -simultaneously freeing the Postal Service from rate/product supervision by the PRC, putting additional distance between the Postal Service and the complications associated with political management (see above),” and subjecting the Postal Service to the additional pressure of having to answer to stockholders with a keen interest in the “bottom line.” A request to repeal the private express statutes as well as privatize the Postal Service was contained in President Reagan’s 1987 budget proposal to Congress. The initiative got absolutely no support — none. Congress and the President might consider directing the arbitrators more explicitly about what constitutes truly comparable pay. Or, they might even consider giving the unions the right to strike and management the right to lock out — and in either of those cases, of course, trigger an automatic suspension of the private express statutes. Finally, the Postal Service might consider increasing its use of contract employees. Besides being lower in cost than full-time employees, the work rules for contract employees are not nearly so confining — and thus pose an opportunity to increase productivity as well.
Patrick Donahoe,Postmaster General and Chief Executive Officer,United States Postal Service
Our total full-time career complement today is 572,000 employees. We will continue to reduce the number of full-time career employees, thereby reducing our legacy costs. By 2020, the Postal Service workforce will be less than 400,000. This tentative agreement also provides immediate cost relief by freezing wages for the first two years, and leads to wage savings of $1.8 billion over the term of the agreement.We negotiated structural changes that resulted in a two-tier career pay schedule for new employees that is 10.2 percent below the existing schedule. We will also be able to increase the use of non-career employees from the 5.9 percent today with restrictions, to roughly 20 percent totally unrestricted. These changes provide a $1.9 billion benefit.
Cliff Guffey.President,American Postal Workers Union, AFL-CIO
Some postal commentators have sought to compare the Postal Service to Federal Express and UPS with regard to the percentage of costs that come from workforce-related costs. In case anyone has that comparison in mind, I want to point out that it is not a valid comparison for at least two reasons. One is that those postal competitors own their own fleets of airplanes, which makes them more capital-intensive than the Postal Service.In addition, FedEx and UPS do not deliver to every address every day as the Postal Service does. While they do some sortation of packages and expedited messages, they do not have to provide sortation of the many billions of First Class and standard mail letters the Postal Service sorts.A unique and extremely valuable feature of the Postal Service is that it provides universal service to the American public.The agreement helps the Postal Service meet its immediate need to constrain costs by freezing wages for the first two years of the agreement. This means that most postal workers will not receive any wage increase for a period of three years, from November 2009 until November 2012. It also follows the pattern set in earlier postal collective bargaining agreements of reducing the percentage contribution of the Employer toward health insurance by one percentage point for each year of the contract. The agreement also will give the Postal Service the right to employ a substantially larger percentage of temporary workers who will be paid relatively low wages.
Below are the full prepared testimonies:
4-5-2011 Louis Giuliano, James C Miller, Patrick Donahoe Testimony
APWU President Cliff Guffey
This bloated circus act under the big top should be paid for by the people who use it.. Do not use dot pay. User pay for products and services. In case demand for Postal products and services do not pay the bills DOWN SIZE.Collective bargaining will price this circus out of business unless taxes are used to cover expenses. Workweek should be 5 days for carriers as no one cares for junk mail on Sat. and if anyones needs to contact someone will send an E MAIL.
STATEMENT NEED CLAIRIFICATION.
The statement referring to retailers wanting to continue to disburse coupons on Sat.. delivery. Coupons ads whatever to induce shopper to special sales are not usally delivered on Sat. but earlier in the week for Fri.-Sun. shopping.. The hidden persuaders in marketing to lure customers are not usally a SATURDAY delivery day as retailers prefer to have shoppers in the retail store than at home on the weekend.. Sale ads are delivered earlier in the week to accomodate retailers to LURE CUSTOMER TO weekend sales.
SAT. MAIL DELVERY IS A WASTED COST. IT IS A NONESSENTIAL COST ITEM THAT OUTWEIGHS DEMANDS. Sunday newspapers have 10-15 sale inserts advertising sales items for the next week. SATURDAY mail delivery BULK STANDARD IS USALLY NOT A N AD FOR A LOCAL SALE BUT MAJORITY TIME AN AARP, GEICO, MUTUAL OF OHMAHA, HEARING AID, Health insurance, automobile ad, no immediate, 2day, or immediate response. Time period for sale is extended. A phone reply, return card, or email return is listed .
Retail ccustomers are at the mall. They are not eagerly awaiting the mail carrie
with their car engine running to dash to the mall to shop with the sales ad delivered on Saturday.
SAT. MAIL DELIVERY IN A NON RECOVERABLE NON ESSENTIAL WASTED COST. Retailers adapt mail advetisements to lure customers for SAT.-SUN. sales. NOT HAVE SALE ADS DELIVERED ON SAT..
Did the new Deputy PMG get a three year contract?
Do all these stiffs really think if we go private, shareholders
are not going to demand managment gets cut by 90%?
You better think that through?
Why is it that none of these honorable gentlemen spoke about the USPS requirement to pre-fund future retirees benefits that cost over $5 billion a year? The fund is overfunded by almost $100 billion but Congress will not return it to the USPS. Thus everyone who buys a stamp or mails a package pays this secret tax. Yes, Congress has already spent the money.
Also, no mention of excessive postal discounts to bulk mailers. Hmmm. Seems alot of ways to save money and get back in the black without attacking the workers. But who does this Congressman go after??????
Postal cost are unsustainable. Merrily blowing smoke on actions to curb cost..
Services that exist at present must be downsized as the magnitude of services are too costly as they cannot be offset by new product generation to increase sales and create revenue.
Maintaining cost is the only means to continue existing as USPS. Research and development is not going to create new products and services as the INTERNET has replaced letter writing and using Postal mail to connec.. E MAIL addresses have replaced street addresses. POSTAL MAIL REQUIRES
PURCHASING A STAMP; TRAVEL TO PLACE IN A BOX FOR POSTAL PROCESSING AND DELIVERY IN 1-2 DAYS. E MAIL MESSAGING IS INSTANT WITHOUT LEAVING HOME.
USPS CAN GO THROUGH ITS SERIANO OF ACTIONS TO REDUCE COST.
ELIMINATING SAT. DELIVERY IS THE MAXIMUM COST SAVINGS THE USPS
CAN DO. FUEL COST INCRASING FOR 193,000 VEHICLES IS NON RECOVERABLE, ELIMINATING SAT. DELIVERY PERSONNEL COST IS AN EFFECTIVE COST CONTAINMENT TO BOTTOMLINE. SAT. MAIL DELIVERY IS A WASTED COST THAT BENEFITS NO ONE. PRIMARY PRODUCT BULK STANDARD ADVERTISING MAIL IS A LOW REVENUE PRODUCT WITH A HIGH DISTRIBUTION COST. A LOOSING SITUATION.
SHOULD THE GOVERNMENT BECOME DISRUPTIVE DUE TO LACK OF FUNDS TO CONTINUE OPERATIONS SOME WOULD INSIST SAT. MAIL DELIVERY IS NECESSARY TO KEEP INDIVIDUALS AND BUSINESS CONNECTED. PRC, BOARD OF GOVERNORS, CONGRESS-POLITICANS, UNIONS NEED TO SEE THE PICTURE AS IT REALLY EXIST. UNLESS NECESSARY ACTION IS TAKEN THE BILLION DOLLAR LOSS AS IN FEB. 2011 WILL CONTINUE AND USPS WILL DIMINISH IN SIZES AND SERVICE EKK OUT AN EXISTENCE AS IT WILL NEVER BE VIABLE AS IT EXIST TODAY.
Mr. Issa as head of this committee you should at least get some basic facts correct yet you don’t. You state…
“The loss of volume to electronic communication and the no layoff provisions of USPS labor contracts mean that more workers are handling less mail than a decade ago.”
The facts are…. Over the last decade mail volume has declined by 18% while the career workforce has declined by 26%.
As a result, in 2010, the USPS delivered more than 28,000 pieces of mail per career employee OVER what it did a decade ago. In 2011 it will even be more because volume is up so far this year and the number of workers continues to decline.
POSTAL REFORM:
Why not allow former USPS employees and USPS retirees to bid on STATUS positions in the competitve service if they have completed 3 years of continuous creditable service. This would save money as far as funding retirement and get some work out of the dedicated that were “nudged” to leave.
I for one worked 2 1/2 years in the competitive service, took more than a 3 year break, and completed the requirement to do more the 3 years of continuous creditable service. I found out that I am still not allowed to bid on STATUS positions, I thought that I was exempt from all of that.
Definition: nudged – given more work than the employee could handle while still be threatened with jail time, repeatitively told that the employee could leave if they did not like it, and given orders to wait longer to start work AND Being told to get back in less time.
Well, the supervisor are having difficulty with the language. I was not been able to understand many of the accents of carriers that I had worked with for years.
It is strange with all of the new testing barriers in place that US citizens can’t pass.
APWU President guffey has sold out the rank and file; along with the future of the APWU. What did he have in mind when he agreed to lower the hourly wages, create split shifts, have no job assignments or work schedules?
If I was hired as a non-assistant at $12 an hour how, and why, would I pay union dues? How do I arrange day care with split shifts? With the drastically reduced salary there is no way anyone could support a family.
And lastly, how long will it take these poor people to become career and who will decide who will get chosen, management ?
I can just imagine the EEO cases that will come from all the people who will be unjustly passed over for the usual selection of management “honeys”, brothers. friends and all the other connected ones.
Management has performed unethically and irresponsibily all along even with the union pushing them; NOW they own these people. God help them.
The “honorable” James C Miller is a sack of sh*t corporate whore that would sell his mother for a dollar. F**k all these anti-American thieves.
So does this mean that management will pay more for their health care, stop the bonus program because of the sinking ship?
Pretty soon your mail carrier will not be able to speak english!