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President's Viewpoint

Bad Postal Legislation Temporarily Defeated

(This article first appeared in the November/December 2006 issue of The American Postal Worker magazine.)

As noted in several news stories, postal employees avoided a major assault on their wages and conditions of employment when Congress adjourned for the election season without passing postal “reform” legislation.

The legislation was nothing more than a smokescreen to hide the mailers’ real goal – to limit their future rate increases.

In its latest form, this legislation would be bad for postal employees, bad for small businesses, and bad for the American people. If it had passed, the only winners would have been the large mailers and mail consolidators. Every postal employee can exhale because a law that would have limited our right to negotiate wage increases and improve working conditions was not adopted.

This respite is only temporary, however. In response to the demands of the large mailers, the Republican chairs of the key House and Senate committees have announced that it is their intent to return for a “lame duck” session following the November elections. At that time, they may again consider this detrimental legislation.

It has been widely reported that the efforts to pass postal legislation in the dark of night on Sept. 30 failed because the bill included changes to provisions concerning employee-injury compensation. Although I am unconvinced that this analysis has merit, we will accept any reason if the result is no action on this negative bill.

APWU, of course, did not wait until the final moments to oppose changes to workers’ compensation proposals: In fact, we publicly criticized this recommendation during the 2003 hearings before the special President’s Commission, and in every related Congressional hearing in which we participated. (The APWU and the Mail Handlers Union have long been lonely voices opposing changes that would have required employees to forfeit pay for the first few days of work missed because of on-the-job injuries.)

The record is clear: APWU opposes changes to workers compensation; opposes the creation of a politically-appointed Postal Regulatory Board with operational and financial authority; opposes rate caps that would strangle collective bargaining, and opposes excessive worksharing discounts that would continue to bleed the Postal Service of revenue needed to properly serve the American public.

What Supporters Are Pushing

Proponents of the legislation have offered several reasons to justify postal reform: a decline in first-class mail volume due to technological competition; the need for predictable and regular rate increases that do not exceed increases in the cost of living; clarification of the USPS mission; more flexibility to operate in a businesslike manner; and the importance of consolidating the postal network.

As finally proposed, the legislation did not address any of these objectives. They were merely part of a smokescreen hiding the real goal: to limit future rate increases for major mailers.

Obviously, it is not possible to legislate mail volume, and no backer of this bad legislation even begins to pretend that this erosion can be stopped by passage of a bill.

While proclaiming that the sky is falling, large mailers have continued their solicitations for customers to convert business transactions from hard copy to electronic transfers, and have virtually eliminated the use of mail as a means of business-to-business communication. First-class mail has declined because Big Business has found a cheaper and more efficient way to communicate. No one contends that passage of postal reform will, for example, return Social Security checks to the mail stream.

The Phony Cry for ‘Predictability’

The cry for “predictable” rate increases is equally as phony. If the large mailers desire rate adjustments every year, the Postal Service can oblige under current law. The frequency of rate increases is within the authority of management and does not require legislative intervention. (In all my interactions with the public, however, I do not recall any individual citizens requesting that postal rates be increased more frequently.)

One of the key elements of this so-called reform legislation is a section that would limit postage increases based on the rate of inflation. With the largest vehicle fleet of any U.S. business entity, how can the Postal Service guarantee that rates will not rise commensurate with the roller-coaster ride in fuel prices? FedEx and UPS are subject to no such limitations and routinely increase their rates without regard to fluctuations in the Consumer Price Index.

Under current law, the Postal Service can increase rates consistent with its revenue needs, with the mandate that it balance revenues and expenses “over time.” When USPS needs exceed the rate of inflation, the law does not restrict the USPS from requesting higher rates. Rate increases over the past 36 years (since the 1970 Postal Reform Act was passed) have been less than the rate of inflation.

The proposed legislation would have capped rate increases to the yearly CPI, regardless of the needs of the Postal Service, except in unusual circumstances. This was one of the provisions that led to serious disagreement among advocates for reform. Some favored an absolute rate cap that could be exceeded only if the “sky was falling,” while others favored allowing more exceptions. In either scenario, Postal Service efforts to raise revenue would be limited by forces outside of its control, and the only place where major savings could be achieved would be in service, such as reducing home delivery from six days to five, cutting services through plant consolidation, or cutting “employee costs.”

What About ‘Employee’ Costs?

The so-called employee costs include wages, benefits, and the substitution of low-wage contract employees for postal workers. In the reformers’ dream world, Exhibit 1 in the first contract arbitration following enactment of such legislation would be a copy of the law denying the Postal Service the ability to raise rates to help pay for wage increases; there would also be an admonition to the arbitrator that he/she is prohibited by law from increasing wages beyond the statutory mandate.

Postal reform is the vise that the large mailers hope to use to put the squeeze on postal management so that it will have no choice but to reduce its “employee costs.”

To supplement these legal restrictions, the Postal Rate Commission would be replaced by a Regulatory Board with authority beyond that of the current Board of Governors. Members of the new Regulatory Board would write the rules and enforce them, leaving postal management with the authority only to sign checks. One responsibility of the Regulatory Board would be to enforce the requirements to operate within the rate caps, and to hold postal management accountable.

Who Is Kidding Whom?

The suggestion that the legislation is designed to permit the Postal Service to operate “like a business” is almost laughable. Every piece of postal legislation begins with a United Parcel Service-imposed definition of the Postal Service that ensures that it will not have the flexibility to compete with the private sector. Who is kidding whom? The latest legislation is really about ensuring that the Postal Service cannot compete with UPS in the small-parcel market or with other private enterprises engaged in activities where its expertise would be a natural.

I challenge the advocates of reform to show me a single provision in the legislation that would permit the Postal Service to operate “like a business.” And try telling postal employees in Pasadena, CA or Olympia, WA that the Postal Service needs legislation to consolidate facilities.

Simply put, postal reform is designed to inhibit the collective bargaining process. The mailers have concluded that since postal management has been unable to reduce employee costs through the bargaining process, they will make it illegal for hard-working postal employees to earn a livable wage. The utter hypocrisy of this insidious effort to reduce employee costs is part of the vicious fight that the mailers have been waging to protect excessive worksharing discounts — price breaks that in dollar amounts far exceed postal employee cost.

APWU opposes bad legislation, and in particular this legislation to “reform” the United States Postal Service. If Congress returns in a lame-duck session and revisits its negative provisions, we will not hesitate to renew our efforts to ensure that it does not become law.

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