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An Accurate Comparison
Burrus Update #02-07, Jan. 26, 2007
Postal employees often compare our negotiated wage increases with those of workers in other industries and conclude that postal raises don’t measure up. Postal increases in the range of 1.5 percent or less, they assert, don’t match the increases of 5 percent or more that the media reports for workers in other industries.
These comparisons are flawed, however, because they fail to take into account that the raises provided in the APWU contract consist of general wage increases and cost-of-living adjustments.
Beginning with the first contract negotiation in 1971, the union sought to include cost-of-living adjustments as part of the wage package — and succeeded. The negotiators of each successive agreement have continued this practice.
Of course, we have the option of giving up cost-of-living adjustments and loading all of the wage adjustments into once-a-year, percentage-based increases. But there are serious drawbacks to this approach: No matter how high inflation rises, wage increases would be frozen at the negotiated amount.
The 1978 Collective Bargaining Agreement provides a vivid example: During the three-year term of the contract, a period when inflation was rampant, postal wages increased by more than 30 percent! If union negotiators had agreed to wage increases of 6 percent each year, postal employees would have been denied thousands of dollars in raises that they received through COLA payments.
Inflation is expected to be relatively low during the term of the recently negotiated agreement, so wage increases of 4 percent or 5 percent without cost-of-living adjustments might appear to be more rewarding. But if inflation explodes — as the result of increases in the cost of energy or housing — the combination of wage increases plus COLAs will generate higher wages for employees.
Any evaluation of wage packages that compares those with cost-of-living adjustments to those without COLAs must include a projection of inflation over the life of the contract. If inflation is expected to be low, workers would be best represented by flat wage increases. If inflation is expected to be high or if the forecast is uncertain, the inclusion of COLAs provides a level of security. Workers can be protected against high inflation only with COLA adjustments.
Unfortunately, we do not have the option of including cost-of-living adjustments in some contracts and eliminating them in others. If management were successful in removing cost-of-living adjustments from our wage package, it is doubtful that agreement would be reached for their return in any future bargaining. Fewer than 10 percent of all workers enjoy cost-of-living adjustments and an arbitrator would be unlikely to restore this provision to our agreement.
The cost-of-living raises provided in the APWU contract are an integral part of our wage package, and any analysis of postal salaries must take them into consideration.
Click here [PDF] to view a chart showing the History of Postal Workers’ Salaries, 1969-2010.
Click here [PDF] for the chart formatted for printing.
William Burrus
President
