First-Ever Layoffs Loom at Postal Service

The U.S. Postal Service faces a serious financial shortfall that is accelerating reductions in its workforce and raising the possibility of the first-ever layoffs of career employees.

Reduced mail volume, rising costs, and a newly enacted cap on rate increases all have taken a toll on the Postal Service’s finances. A gradual shift to electronic communications and bill payment is shrinking the number of first-class letters, a mainstay of postal revenues. And the current economic downturn has led to drops in advertising mail volume.

Increasing fuel prices have been a big factor in worsening postal finances, compounded by a legal restriction enacted two years ago against raising the price of most services beyond the rate of inflation. The cap on rate increases was a major victory for the big mailing industry, but combined with rising costs, it has seriously squeezed the postal budget.

Unionized postal workers have not yet experienced layoffs, which have been confined to casual employees, a small percentage of the workforce.

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But Postmaster General John Potter, after reporting losses of $2.3 billion in the fiscal year ending September 30, informed the unions that 16,000 craft employees (out of approximately 600,000) are not protected by contractual, seniority-based no-layoff clauses.

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The Postal Service is offering early retirement which, based on acceptance rates thus far, will have around 7,000 takers. In early 2009, when the number of early retirees will be known and income can be assessed for the traditionally profitable fourth quarter, there’s a chance that the first layoffs of craft employees may occur.

DAY SHIFT ENDANGERED

Cost pressures are having other effects. Most of the sorting and processing of mail already occurs between 3 p.m. and 6 a.m. But, without notice to the affected unions, postal plant managers have been told to plan for ending day shift operations. If implemented, this would force thousands of clerks (represented by American Postal Workers Union) and mailhandlers (National Postal Mailhandlers Union) out of the more desirable day-shift assignments.

The elimination of daytime jobs would disrupt the family lives and the physical health of those displaced, mostly high-seniority workers. APWU President Bill Burrus has speculated that this action is partly aimed at pushing them to retire.

One proposal to recoup costs would be to ask Congress for an exception to the rate cap, pointing to the cost of fuel. However, one union president has cautioned that too big an increase might further reduce business and drive the shift to e-communication.

The situation may encourage management, or the U.S. government, to push for more subcontracting or privatization, areas of longstanding battles with the unions. For example, the Postal Service recently asked for bids from private companies to outsource work carried out by its network of bulk mail centers. Unions have responded by pushing for favorable legislation, and by pointing out the disagreements on privatization between major-party candidates in the presidential and congressional elections.

Postal workers have been relatively immune from the concessions that have hit other industries. We now face a set of circumstances, termed “a perfect storm” by Burrus, that will challenge the ability of the unions to protect postal jobs, pay, and working conditions.


David Yao is vice president of the Greater Seattle Area Local APWU.

Comments

Anonymous (not verified) | 10/27/08

"and income can be assessed for the traditionally profitable fourth quarter, there’s a chance that the first layoffs of craft employees may occur". Since when did USPS make a profit in the fourth quarter? USPS makes it or breaks it during Oct - Dec, Qyr 1.

Anonymous (not verified) | 10/27/08

1. The slackers won't be asked to work
2. More will be expected from the good workers
3. The union stewards will need just as much union time
even if 90% of the workforce was reduced.
4. Management officials won't be held responsible for poor management.
5. The APWU President will continue to ride to work in a chaffeured limo.

Anonymous (not verified) | 10/27/08

Eliminate Saturday delivery and this would alleviate the energy crisis, billions of gallons of gas, with less maintenance of tires and oil that can be figured in an enormous amount of savings a year. Which would also be less cumbersome of scheduling carriers in rotating days off.
This idea has been around before and maybe now is the right time to enact.

Anonymous (not verified) | 10/27/08

You must not be a carrier! This would eliminate all OT on your non-sched day. Also the econmic impact would cripple the USA as mail flow on saturday is essential to making this great country what it is!!! The citizens of this great country deserve mail delivery 6 days a week,and if we don't do it some else will!

Anonymous (not verified) | 10/28/08

Saturdays off sounds like a great idea, unfortunately federal banking law does not allow it. Federal banking law states that mail has to be delivered at least once every three days; with no saturday delivery the post office would be breaking the law if we had a monday holiday (3 consecutive days with no mail delivered!). Saturdays off sounds great, but unfortunately won't happen.

Anonymous (not verified) | 10/28/08

Boy are you selfish. You are concerned with your OT when people may not have any job. Yeah, eliminating all that OT will save a lot of $$$. It's time to live within your means. That 6 day delivery for the great of the country is when everyone counted on hardcopies to function their business. Move up to the new century when most business transactions are done electronically. Just like this email you are using.

Anonymous (not verified) | 10/27/08

The mail volume would be the same, just delivered over 5 days instead of 6. We could go to 4 10's knowing that on Mondays, we would probably work 12. This would actually create more T6 positions since a T6 would have 4 routes on a brace, rather than the current 5, yet it wouldn't reduce the number of overall routes. It would reduce our delivery expense by almost 20%, which could prop up our profitability. One thing that would also help dramatically is to STOP GIVING OUR PROFITS TO CONGRESS!!! This last year we supported congressional operations more than $400 million! Add that to the gas price increases and re-funding of retirement funds the USPS is being required to make and we made a nice profit... The USPS is charged with universal delivery... yet there is no prescription on how to accomplish the goal. I can see a day where unprofitable segments of delivery operations i.e. extreme rural areas, where the USPS will build large delivery units that have APC's and P.O. boxes only. If it all comes sorted (flats and letters) then it would only take a few people to distribute at the facility. People within 20-30 miles would pick their mail up at the facility where they would be given a free p.o. box. That's what MY grandparents used to do... My other grandparents picked their mail up at the general store... Customers that wanted larger p.o. boxes could pay for one that is larger... with the electronic age here it could all be done online. All of these ideas continue to offer universal delivery, quicker and more effective service to our customers, while reducing the USPS delivery expense dramatically for these areas.

Anonymous (not verified) | 11/22/08

Do you begin to realize the effect the lack of saturday delivery would do to the carrier force you would no longer require a t-6 posistion as ther regular carrier would work 5 days a week and wouldn't need a t-6 to fill that 6th day hmmmmmmmmmm now what do you do with all the t-6's whose posistion you just eliminated in one swift swipe and as it trickles down what about all the ptf's you just put out of work. great plan.

Anonymous (not verified) | 10/27/08

I am sorry to tell you that the importance of the Postal Service to business in the United States is now minimul to what it used to be. Business would not flinch is the one day, Saturday was eliminated.

Anonymous (not verified) | 10/27/08

We all know that the Casual workforce must be dissolved before any craft employees. I know for a fact that at Augusta GA P&DF it will be a pleasure to see them go because they make up to 10 hours a day and weekends off, which really ticks off many craft employees. Management would really have to deal with the crafts.

Anonymous (not verified) | 10/27/08

I am under the assumption that lay-offs according to the ELM will get up to 52 weeks of severance pay plus a 10% penalty from the OPM/Postal Service for anyone being over 40 years of age. If elgible for VERA you get only what you have earned on age and years of service...nothing else am I correct?

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