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USPS Fails to Reach Agreement with Unions on Labor Contracts

November 21, 2010
WASHINGTON, DC—Nov. 21, 2010—Contract negotiations with the American Postal Workers Union, AFL-CIO (APWU) and the National Rural Letter Carriers Association (NRLCA) expired at midnight Saturday, Nov. 20. While negotiations with the NRLCA resulted in an impasse, the Postal Service and the APWU agreed to extend the negotiation deadline until Tuesday, Nov. 23 at noon ET.

Should APWU negotiations fail as they have with the NRLCA, a process begins that could result in a third party determining contract terms and work rules for more than 324,000 employees whose wages and benefits exceeded $20 billion last year.

Unlike the private sector, Postal employees are not permitted to strike when negotiations come to an impasse. That’s because Congress designated the Postal Service as an essential service to the nation. An arbitrator determines the final outcome and is not legally required to consider the Postal Service’s financial obligations when rendering a decision.

The drop in the economy coupled with the shift to digital communications has created the greatest loss in mail volume since the Great Depression. Mail volume peaked at 213 billion pieces in 2006 and plummeted to 170.6 billion in the fiscal year ending Sept. 30. Revenues shrank from $72.6 billion in 2006 to $67.1 billion. The 2010 net loss was $8.5 billion. By 2020, mail volume is projected to drop to 150 billion pieces.

To remain strong into the future, the Postal Service needs to control costs through a flexible workforce to adapt to the nation’s changing mailing trends.

The Postal Service operates solely from the sale of stamps and related services without taxpayer subsidy. As a quasi government agency, it deals with the challenges of the private sector while continuing to operate under federal regulations and Congressional oversight.

Reasonable wages and benefits are just one element needed to help the Postal Service fully meet its financial obligations and remain strong in the future.

• Survey data reflects that the public favors 5-day delivery over using taxpayer funds and other alternatives. Adjusting delivery days to better reflect current mail volumes and customer trends can save the Postal Service $3.1 billion annually. The Postal Regulatory Commission is expected to announce its recommendation within the next month. Congress has yet to consider this concept.

• Created in 2006 under stronger economic conditions, the Postal Accountability and Enhancement Act requires the Postal Service, unlike the private or public sector, to prefund retiree health benefits. This equates to an average of $5.6 billion in cash flow every year through 2016, in addition to the $2 billion it annually pays for current retirees. The Postal Service has asked Congress to restructure retiree health benefits payments to “pay-as-you-go,” comparable to what is used by the rest of the federal government and the majority of the private sector.
 

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