The U.S. Postal Service and its four largest unions agreed to extend contract talks in a continued effort to reach negotiated settlements, the USPS said last week.
Negotiations, which began in August and were scheduled to end Nov. 20, have been extended until midnight Nov. 30 with the National Association of Letter Carriers, AFL-CIO; the National Rural Letter Carriers’ Association and the National Postal Mail Handlers Union. Negotiations also have been extended for the American Postal Workers Union, AFL-CIO, but no end date has been announced. Negotiations resume today.
“It’s very important that we get an agreement, or then it goes to the arbitrator and it’s up to them to decide,” H. Glen Walker, the postal service’s new executive vice president and chief financial officer, said in an interview this month. “[Labor costs are] 78 percent of our cost base, so it is the single most important thing that affects rates at the moment.”
However, most observers long have predicted that negotiations would be resolved through binding arbitration.
In a telephone message to members Nov. 21, APWU president William Burrus said that despite intense discussions that day, “agreement on all of the issues is still beyond our grasp. We are close, but because of the importance of the issues that are not yet settled, we cannot announce a final agreement. APWU has proposed bold steps to address important issues for postal employees. But because we are attempting to break new ground, the final pieces of an agreement pose difficult challenges. We will apply all of our resources to close agreement on these tough issues.”
In general, the negotiations with the unions cover topics involving wages, benefits and conditions of employment.
For example, the mail handlers union seeks the continuation of general wage increases in every year of the contract as well as the continuation of cost-of-living adjustments in each year; and maintenance of all current benefits and benefit programs including the formula for determining employee contributions for health insurance. The union also wants one-level pay upgrades for all Level 4 and Level 5 mail handlers, plus other adjustments to the current pay scales.
The USPS, on the other hand, wants to change the current general wage increase and COLA adjustments.
“We know the postal service is certainly trying to change those arrangements,” said Bob McLean, executive director of the Mailers Council. “We don’t know if they are seeking a reduction or a complete elimination, but we do know they are seeking a change.”
Under law, he said, USPS employees are to be paid in a manner comparable to the private sector.
“Back in 1971, when the Postal Reorganization Act went into effect, most private sector employees received a COLA allowance,” Mr. McLean said. “Today, almost a miniscule number receive COLAs. So, if the postal service is supposed to pay comparably to the prevalent pay practices in the private sector, why are they still paying COLAs?”
Annual increases, he said, are common in the private sector, “so that’s eminently defensible. But COLAs are not.”
General wage increases and COLA benefits also increase the pension payments employees receive, he said.
Mr. McLean also said the USPS wants to change how it handles health care benefits. In general, the USPS pays a higher percentage of total health care costs for postal employees than the federal government pays for federal employees.
“We believe the postal service is looking to change the percentages,” he said. “The postal service still has CPI-based COLA adjustments in its collective bargaining agreements. Combined with double-digit [percentage] growth in health care benefit costs — an increase of $700 million in 2006 alone — salaries and benefits are $4.5 billion more than they were four years ago, even with tens of thousands fewer employees.”
This is also the first time the USPS has individually negotiated new contracts with all these unions at the same time. Some insiders said this is wise, though Mr. McLean isn’t so sure.
“It is very taxing on the postal service because they have to have four different teams of individuals working at four different negotiation tables,” he said. “So it requires a lot more staffing time and work from the postal service. I don’t know if this is an advantage or a disadvantage.”