Facing a projected loss of more than $8 billion for this fiscal year and a projected need to reduce its workforce by 220,000 employees by 2015, the Postal Service began today contract negotiations with the National Association of Letter Carriers, AFL-CIO (NALC) and on Aug. 30 with the National Postal Mail Handlers Union (NPMHU). The two unions represent 247,000 of the Postal Service’s 560,000 career employees.
The NALC represents 200,000 employees who work as letter carriers delivering mail primarily in urban areas. The NPMHU represents 47,000 employees who work in mail-processing plants and Post Offices. Respectively, wages and benefits for the NALC- and NPMHU-represented employees exceeded $15 billion and $3 billion last year. Both contracts expire Nov. 20, 2011.
Two other unions represent most other postal employees. Employees represented by the American Postal Workers Union, AFL-CIO (APWU) work as clerks, mechanics, vehicle drivers, custodians and some administrative positions.
Their wages and benefits exceeded $15 billion last year. The National Rural Letter Carriers’ Association (NRLCA) represents employees who deliver mail primarily in rural and suburban areas. The cost of their compensation package was nearly $6 billion last year.
According to the Postal Service, mail volume peaked in 2006 at 213 billion pieces. The effects of the recession coupled with the ongoing shift to digital communications resulted in mail volume plummeting 20 percent to 171 billion pieces last year. Over the last four fiscal years, the Postal Service reduced its size by 110,000 career positions and saved $12 billion in costs. Expenses, however, continue to exceed revenues in part due to an overstaffed workforce.
“If the Postal Service was a private sector business, it would have filed for bankruptcy and utilized the reorganization process to restructure its labor agreements to reflect the new financial reality,” said Anthony Vegliante, chief human resources officer and executive vice president. “Wages and benefits for all employees represent nearly 80 percent of our costs. To remain solvent, we must negotiate contracts that address our total labor costs and enable us to downsize quickly to adjust to America’s changing mailing needs while being fair to our customers and employees.”
Last week the Postal Service confirmed that it is exploring additional legislative proposals that ask Congress to allow it to establish its won health benefits program, administer its own retirement system and adjust the size of its workforce to match operational needs and the changing marketplace.
