December 7, 2020

And the beat goes on.  The labor negotiation trend that proliferated during the boom years of USPS volume doubling from 100 billion in 1980 to 200 billion in 1999, somehow continues in 2020 with volume down in the dumps and a broken “business model.”  The proximity and content of the USPS management’s 44-month agreement with the 205,000-strong National Association of Letter Carriers and the PRC’s busting of the price cap on postage increases on November 30 is very telling.

We would submit that the most broken part of the USPS “business model” is its labor negotiations.  The agreement looks like it comes from a different planet than for-profit and nonprofit businesses and organizations in the United States.  You can read all the gory (or delightful if you have a letter carrier in the family) details here.

How many organizations in the private sector can guarantee for almost four years: no layoffs, plus wage increases, plus cost-of-living allowances, plus great affordable health insurance, and more?  Here’s a sampling of the deal that labor/management negotiators agreed to, subject to ratification by the union members:

• No layoffs continue.

• All letter carriers are guaranteed four wage increases:
• 1 percent, effective Nov. 23, 2019, paid retroactively;
• 1 percent, effective Nov. 21, 2020, paid retroactively;
• 3 percent, effective Nov. 20, 2021;
• 3 percent, effective Nov. 19, 2022.

• City Carrier Assistants will receive additional wage increases of 1 percent, for a total of 2.1 percent on November 23, 2019 (paid retro-actively); 2.1 percent on November 21, 2020 (paid retroactively); 2.3 percent on November 20, 2021; and 2.3 percent on November 19, 2022. These additional 1 percent increases will be paid instead of COLAs for CCAs.

• All career letter carriers will receive seven COLAs based on changes in the Consumer Price Index using the existing formula with July 2019 as the base month. The first two will be paid retroactively: $166 annually effective February 29, 2020, paid retroactively, and $188 annually effective August 29, 2020, paid retroactively. The remaining five will be paid in the future: March 2021, September 2021, March 2022, September 2022, and March 2023.

• Two additional wage steps added to the top of the existing scale for career carriers.

• Automatic conversion of non-career CCAs to career status after 24 months.

• No reduction in the USPS contribution toward health insurance.

This is based on the union description of the agreement.  USPS management would say they got some good things out of the agreement, but they do not share them with customers.  From our perspective, we do not see how any businesslike organization could survive in today’s competitive environment with 70 percent of its cost structure based on labor agreements like this one.  Or price within a CPI cap.  Of course, USPS is not a business.