Against a backdrop of economic difficulties and a hostile Congress holding some key cards, the American Postal Workers Union reached a tentative agreement with the U.S. Postal Service that grants large concessions but achieves union objectives.
The new proposed agreement announced in March creates a lower wage scale for new career employees and an additional second-class workforce, while bringing back thousands of contracted-out jobs and protecting existing employees against layoff.
At the outset, the union's negotiators had stated their goal of returning work to the bargaining unit by showing that it would save the employer money to do so.
However, the proposed deal would greatly expand the “non-career” workforce, create a two-tier pay scale for career workers, and replace the five-day, 40-hour work week with a huge range of possible schedules.
The agreement has prompted a sharp internal debate over the ratification vote, including a call for the contract's rejection by the outgoing national president, Bill Burrus. A complete copy of the agreement is available online at the APWU website for members only, and a paper copy was mailed to every member with the ballots, which are due back on May 10.
The financial pressures on the USPS influenced both the negotiations and the attitudes of union members toward the contract.
The pressures have come from many sources: Mail volume has been declining. A 2006 postal reform bill capped postage increases to the rate of inflation and also imposed an onerous requirement for the USPS to pre-fund its retirees’ health insurance to the tune of more than $5 billion per year. The pre-funding contributed most of the postal service’s huge $8.5 billion loss last year.
This year, the pre-funding requirement would tear such a big budget hole the USPS would fall into a situation akin to bankruptcy. Many in the postal community had hoped that legislators would give relief from the requirement, based on studies that show the federal retirement system has received billions of dollars in overpayments.
But the anti-worker members of a postal oversight committee in Congress have blocked relief, and the Postal Rate Commission has rejected requests for an emergency rate hike.
WHAT’S GIVEN UP
So USPS sought to save on labor—and if approved, the contract would grant two major cost-saving concessions.
The lower wage scale for new hires both starts at a lower level and ends at a lower step than current employees.
In another huge change, an additional kind of second-class workforce, “postal support employees,” would replace casuals and transitional employees. While the pay is better than the old categories of “non-career” employee, the numbers allowed are greatly expanded.
There had been a 6 percent cap on casual jobs, but “postal support” hiring now would be allowed up to 20 percent of clerks and 10 percent of maintenance and motor vehicle service work.
The pay scale ranges from $12 to $15.85 an hour. Current career full-time employees in the most common classification make up to $25 an hour.
What will future employees think about their comparatively lower compensation and benefits?
They will have the right to join the APWU, but will many of them want to join a union that negotiated this for them?
Two-tier wage scales are divisive by nature, having two sets of employees working side-by-side doing identical work under different systems of rewards. The more privileged group often fears that management has a financial incentive to harass them into retiring. The lower-paid group—regardless of how glad they were at first get the job—is well aware that the union negotiated their inferior status, and responds accordingly.
The concessions, however, allow the Postal Service to say it has reduced labor costs by $3.8 billion over four years. Some advocates for a “yes” vote feel the big sticker price might forestall more drastic concessions, such as the ones forced on autoworkers in 2009.
But “vote no” advocates ask if it is fair to make postal employees sacrifice to offset shortfalls caused by congressional inaction and postal rates that have unfairly benefited big business for years.
END OF THE 40-HOUR WEEK
A third concession takes away the guarantee of a 40-hour job for clerks and motor vehicle service workers.
The proposed contract gives management the flexibility to establish “non-traditional full-time” jobs consisting of work weeks with anywhere from 30 to 48 hours per week.
The regular schedule could be from six to 12 hours per day, with no overtime paid if part of the regular schedule.
The hours and days off could now be changed, and must then be put up for bid, along with the jobs of every junior employee in the section. Management could create as many non-traditional jobs in retail as “operationally necessary.”
Current full-timers could have jobs reconfigured to include days with as little as six and as many as 10 hours.
In addition, management could now create “full-time flexible” jobs, up to 10 percent of the clerk craft, without a fixed weekly schedule.
You can bet the Postal Service will be redrawing schedules across the board, causing serious instability. Employees will “bump” in the bidding process and less-senior workers might be forced to choose between a job they don’t want or being forced to work on a shift they hate in a facility much further away.
The kind of disruption and stress we have seen during a station shake-up could be repeated many times over, but this time with jobs with strange, uneven schedules. A worker with a routine that involves childcare or getting kids to or from school faces the possibility of serious disruptions.
The biggest gain has been the return of bargaining unit work to the craft, a principal objective of union leaders, in response to the steady decline in postal jobs and membership. Winning back work was perceived as a quicker and easier way to regain membership than organizing workers at private companies with postal contracts.
More than 1,000 jobs at call centers, 1,500 custodial jobs, 800 administrative and technical jobs, and roughly 1,300 motor vehicle services jobs would be either created or brought back into APWU jurisdiction. Most of these jobs would be filled by the cheaper category of “support” employee.
The no-layoff clause for current employees was retained as well. Forced reassignments would now be limited to jobs no further than 50 miles away. (As an alternative to layoffs, postal employees whose jobs have been eliminated had been reassigned to jobs that were sometimes hundreds of miles away.)
Raises amount to a total of 3.5 percent for the 4.5-year contract. Plus, three years’ worth of COLA increases will accrue (they will start to be paid in March 2013).
The share of health premiums paid by employees will rise from 19 percent to 24 percent if they choose any of the non-APWU federal health plans.
Both APWU health plans will escape the cost-shifting that applies to the other plans, with the employee's share just 5 percent for the cheaper “consumer-driven” plan.
A number of changes are designed to benefit clerks in small offices, including making it easier for part-timers to get full-time jobs.
Another important achievement was the ability to negotiate, so that work that might be outsourced must be done by APWU-represented employees if it would be cheaper. One hopes that the work would be won by figuring out how to do it smarter, and not just by underbidding the labor cost.
UP OR DOWN?
Locals are vigorously debating the contract, with position papers by current and former officers circulating by email, blog, and Facebook.
A local president criticized the “concessions of our 40-hour work week, unlimited casuals and a crippling and divisive pay cap on future union members” as a “trade off to replenish the lost union revenue” from a shrinking workforce. He also cited the changes favoring the APWU health plans, an increasing source of union revenue, as evidence of the national officers’ vested interest in ratification.
At the same time, extremist Republicans on the House oversight committee challenged the concessions as not going deep enough, even though they are projected to cost workers almost $4 billion. Some advocates for ratification have cited the hostile political climate towards public employees as reason for a “yes” vote.
In the complicated tangle of trade-offs, the contract allows the Postal Service to save money and the APWU to shore up its finances to offset declining rolls. Current workers get a mixed bag, including disrupted schedules, and future workers may never attain the current level of pay and benefits.
Former national APWU president Bill Burrus described the central issue in the ratification debate as “support or opposition to the union’s decision to trade the wages of the next postal generation for immediate contractual changes.”
David Yao is vice president of the APWU-Seattle.