By Peter Shapiro
September 20, 2011
My local newspaper chose a strange way to honor workers on Labor Day. On page one, they printed a New York Times story warning that, thanks to its “generous labor contracts,” the U.S. Postal Service is about to go out of business.
The story asserted that “decades of contractual promises made to unionized workers” had brought the Postal Service to the point of defaulting on a $5.5 billion payment due Sept. 30, and possibly shutting down entirely this winter.
The Times detailed the drastic cuts proposed by Postmaster General Patrick Donahoe: No more Saturday delivery, closure of 3700 post offices and 300 sorting facilities nationwide, elimination of 220,000 jobs. Most of these moves require Congressional approval and the threatened shutdown was clearly supposed to help Congress make up its mind.
What wasn’t mentioned in the article: The $5.5 billion payment in question is part of a bizarre requirement imposed upon the USPS by Congress five years ago to prefund its retiree health benefits 75 years in advance over a ten-year period. In effect, the Postal Service is paying for the retirement of workers who haven’t even been born yet, let alone hired. Imagine the outcry if the feds made similar demands on private businesses!
Also unmentioned by the Times: Donahoe’s announcement came just as the post office was scheduled to enter contract negotiations with the National Association of Letter Carriers.
Forking over those annual $5.5 billion payments has cost the USPS $20 billion in operating losses over the past four years. Without them, the Postal Service would still be in the black, despite a big falloff in mail volume when the economy went south three years ago.
If Congress was serious about preventing the drastic service cutbacks Donahoe has proposed, there’s an obvious solution: End the prefunding requirement.
For those who hope to strip postal workers of their union rights, however, the prospect of a default presents a golden opportunity.
Representative Darrell Issa is the chair of the House Committee on Government Operations. Strictly speaking, the USPS is not a government operation and it receives no federal funds. Still, Issa’s committee is charged with overseeing it.
As a young man, according to a January profile in the New Yorker, Issa was busted twice for auto theft . Both times he managed to escape prosecution. Today he is the richest member of the House, having made a fortune in the car alarm business.
Issa has proposed a bill that would require the Postal Service to cut its expenses by $3 billion a year. If it failed to do so, its affairs would be put in the hands of a politically appointed commission with the power to scrap its collective bargaining agreements and slash wages and benefits.
I don’t know that the Postmaster General wants Issa’s bill to pass. I do know that he’s employing the same strategy. He’s using an essentially manufactured crisis to apply the screws to his work force.
To an alarming extent, the media is buying the story. The New York Times makes an issue of the fact that labor costs account for 80% of USPS expenses, “compared with 53% at United Parcel Service and 32% at FedEx, its two biggest private competitors.”
It’s a meaningless comparison. Neither FedEx nor UPS is charged with maintaining a universal service network, a task that requires human labor. When its customers need to ship to a location it doesn’t handle, UPS typically contracts with the Postal Service for “last mile” delivery. Unlike FedEx, the Postal Service does not sink a big chunk of its revenues into maintaining its own fleet of planes. It does not spend millions lobbying Congress, investing in other businesses or paying off stockholders. Whatever money it makes is ploughed back into operations.
And, for what it’s worth, there’s no significant difference in pay and benefits between the Postal Service and UPS, whose drivers are under Teamster contract. Despite a 30-year-old no-layoff clause in its union contracts, the USPS has managed to reduce its work force by nearly 30% in the past ten years. In my district, there’s a hiring freeze which has left some offices so understaffed that veteran carriers are routinely required to work 60-hour weeks.
Retiring workers are not replaced – or if they are, it’s with ‘transitional employees’ who enjoy rudimentary union protection but have no benefits, job security, seniority or bidding rights. Supposedly hired as a temporary expedient when the post office was introducing new mail sorting machinery, the “TEs” have emerged as a permanent feature of the postal work force and spend years vainly waiting for promotion to career status. They can be laid off at any time.
In the private sector, ‘downsizing’ is considered good business strategy, and ‘leaner, meaner’ companies are the ones that attract investors. Typically, what’s involved is the shift of capital from productive parts of the economy to the financial sector, where few workers are employed but the profit margins are enormous – or used to be, before the Wall Street meltdown of fall 2008.
The social costs of business downsizing are enormous, but there’s a certain crazy logic to it: under capitalism, businesses exist to make money. But downsizing the Postal Service makes no sense at all. For all the politicians’ prattle about the USPS needing a new “business model,” the post office isn’t really a business. It’s a public service, mandated by the U.S. Constitution. It reaches every household and business address in the country; its universal service network, built up over two centuries, is as much a part of the nation’s infrastructure as our interstate highways or public schools.
But its workers are unionized, so it’s fair game. Just as our public schools are being crippled as scarce tax dollars are diverted into corporate-run, non-union charter schools, reactionary forces in Congress are hell-bent on compromising the nation’s mail service beyond repair as the necessary price of busting the postal unions. In the process, the public is being robbed of a vital public service, and the right of all workers to union protection is further undermined.
Sept. 30 is the deadline for the USPS to make the $5.5 billion payment Congress demands. On Sept. 27, the four postal unions will be demonstrating at local Congressional offices across the country in an effort to get the truth out. Go to saveamericaspostalservice.org to find out where the demonstration in your area will be happening. Then come out and join it – to keep the mail moving and to stand with the brothers and sisters who move it.
Peter Shapiro is a retired member of National Association of Letter Carriers Branch 82 and is active in Jobs with Justice.