The battle between public-sector unions and the government may have reached a peak in Wisconsin earlier this year, but it’s another conflict that could deliver the fight to all corners of the country through rain, sleet, and snow: the one at the United States Postal Service.
Last month, the USPS and one of its largest labor unions, the American Postal Workers Union, came to a tentative agreement on a contract that would give raises to more than 200,000 employees but force them to pay more for health insurance. On Tuesday, the House Committee on Oversight and Government Reform held a hearing on the contract. While the contract could save about $3.8 billion, the chairman of the committee, California Republican Darrell Issa, said it “falls short” of its goal.
“We have deep concerns that some of the provisions of the contract might in fact be the wrong direction toward less flexibility, less ability to trim the work force, and less ability to make the kind of investments for the future that we need to make,” Issa said.
James Miller, a member of the Postal Service’s board of governors, agrees that the contract didn’t go far enough, noting that without major changes, the Postal Service could default by September 30.
“My response is that we did the best we could under existing law,” he said. The problem, he said, “is that the system is biased in favor of labor and against management. The unions know this and we know this.”
Patrick Donahoe, the postmaster general, says that the only way to get the Postal Service back on track is to change certain laws. Donahoe says that the “big money” would come from reforming the retiree benefit system and getting rid of Saturday delivery.
“Get those things out of the way, and you will never see us again,” Donahoe told the committee. “All you will hear are accolades about how good an organization the U.S. Postal Service is.”
The fact of the matter is, the Post Office is not doing well in the age of electronic communication. It may show annual revenues of more than $70 billion, but the few last years have not been good to the industry. The USPS reported losses of $5.1 billion in 2007, $2.8 billion in 2008, $3.8 billion in 2009, and $8.5 billion in 2010. Since 2008, it has cut its work force by about 100,000 to 572,000, making for its smallest work force in more than 20 years.
Rep. Dennis Kucinich, D-Ohio, had concerns about efforts to tip the scale more in favor of management. First, he said, he worries about retired employees who put in 20 or 30 years having to go to the government to beg for their full health benefits. Kucinich also bristled at the idea that the USPS may be moving toward privatization.
“There’s an attack on the idea of universal service,” he said. “Once you privatize you can legitimize cutting down wages and benefits and limiting service.”
This article appears in the April 5, 2011, edition of National Journal Daily PM Update.