The National Association of Letter Carriers and the U.S. Postal Service reached an agreement this week on a three-year contract that includes substantial wage and health benefit increases for the more than 240,000 postal employees.
The agreement, issued by a three-member arbitration board, gives all letter carriers a 3 percent pay increase on Nov. 20, 2000. On average, the annual base salary of letter carriers will increase to $37,508 in 2000; and, for the first time since 1907, letter carriers will be paid a higher rate than postal clerks.
Other features of the contract include annual wage increases of up to 2 percent over three years, six cost-of-living adjustments and an increase in health benefits covered by the USPS, to 85 percent. These contributions are consistent with the voluntary agreements struck earlier this year with the 361,000-member American Postal Workers Union and the 61,000-member National Postal Mail Handlers Union.
Insiders said the decision will cost the USPS hundreds of millions of dollars and will have extreme consequences on the agency’s ability to remain competitive in the marketplace.
Jerry Cerasale, senior vice president of government relations at the Direct Marketing Association, said the cost could also have an impact on direct marketers since it will undoubtedly affect the rate increases they will have to pay in early 2001.
“[Among other increases,] the maximum salary of letter carriers will rise in the year 2000, and as a result, there is going to be a significant increase in the costs of labor, which is 75 to 80 percent of postal costs,” he said. “And the impact means higher rates in 2001.”
Cerasale said it could have an even worse ripple effect. It may delay people from retiring, so higher-priced employees may stay, which will impact rates in the future, he said.
The agreement is retroactive to Nov. 20, 1998, when the old contract expired, and will run through Nov. 20, 2001. Contract talks between the postal management and the letter carriers’ union opened Aug. 24. The arbitration decision is final and binding. n
