Saturday, March 19, 2011

Comparable Wages

One of the challenges in trying to figure out whether the Postal Service has signed a financially responsible contract is that there are few good figures available regarding what are market wages for the work that APWU members do.    The Teamsters Union have recently posted in UPS Teamster Update a comparison of UPS and FedEx Express employee wages.   I have pulled out the two categories that are comparable to work that APWU members do.   The figures below only include health and welfare and pension benefits and do not inclde compensation costs for employment and unemployment taxes and workers compensation insurance.

The hourly rates are comparable to information that I have seen elsewhere.   They indicate the wages that efficient operators can offer.   The new contract should move average APWU wages within the range listed here once a significant portion of current APWU members retire.

The benefit costs here include both health care and pension benefits.  UPS has a very generous benefit package for most employees which includes a defined benefit pension and 0% employee contribution for health care benefits for full time employees.   Most part time UPS employees  likely have less generous benefits than the "average" benefit.   Turnover of part-time workers is high so many do not accrue pension benefits and their health care benefits are not as generous as those for full time employees.   UPS offers part-time employees a number of non-traditional benefits as well, most notably tuition assistance in the form of loans and grants.

The average hourly benefits listed in the chart for full time FedEx employees most likely underestimates the benefits full time employees receive.   At $3.33 per hour the benefit listed for full time worker would be the equivalent of a company contribution of $577.22 for health benefits every month.   This would appear to be the figure that FedEx pays as its contribution for single employees.  In addition to health care benefits FedEx offers its employees a defined contribution pension as well as a 401-K plan with a match.   The $3.33 figure appears too low to include the hourly cost of  retirement benefits. 

The wages and benefits listed above are paid by companies that profitably provide parcel delivery services. These companies are both known for the efficiency of their operations and their ability to deploy capital to most efficiently use the labor sorting parcels and transporting parcels between facilities.  These two carriers are also now facing rising demand for their services to the point that they are able to raise prices to both customers that pay list prices and those that negotiate rates at discounts to list rices.  

The Postal Service faces a different operating and competitive landscape.   It has significant production and transportation overcapacity and public notice processes that discourages the elimination of this overcapacity, declining volumes and revenue, limited capital to improve the efficiency of its network, regulatory constraints that prevent rational pricing and competitive constraints that prevent it from extending its product line to generate more revenue per item delivered.  These constraints make it difficult for the Postal Service to pay market rates of compensation that one must assume are within the ranges shown above.   The sooner these constraints are removed, the sooner APWU members can be assured that their compensation will fall within the ranges listed above, otherwise they can expect that compensation levels in future contracts will have their members fall behind wages paid in the private sector.

17 comments:

Douglas said...

"and 0% employee contribution for health care benefits for full time employees"

I don't know where you get your info but I am a postal employee of 33 years and I have paid into my health benefits every year. The Post Office does help a lot but in 2010 I still paid in $2400 for the year. Hardly free

Anonymous said...

FedEx is considered a Railroad operation so they don't play on equal ground!

Anonymous said...

Hey Douglas, read the article; it says "UPS" full time workers pay 0% towards health benefits, not USPS employees.

Anonymous said...

Douglas, 0% for United Parcel Service employees. Do you work in contract administration?

Anonymous said...

ups= 0%,not usps

Anonymous said...

re-read it Douglas....0% is for UPS employees

Andy Kearney said...

You have to look at the total benefits package to do a fair comparison. No layoff clauses, cost of living adjustments, even type of Medical coverage - does it include Dental that most others do not? So be far and give us all the info and not a part of it that you are using to make your point stronger.

Andy Kearney said...

To do a fair comparison you need to present all the facts. The contract status of all involved. Do they have no layoff clauses? Do they have a cost of living allowance? Do they have profit sharing? Does the cost of their health benefits include dental? How about if their job is eliminated? How far can they be asked to move and uproot their families? Show all the facts and not just the ones you need to prove a point.

Anonymous said...

I sincerely doubt that the ups inside workers are required to memorize up to 2 1500 item schemes at 95% accuracy and memorize a collection of rules books the size of the DMM and IMM so they can also run the retail side of the business when needed!

Anonymous said...

So in effect APWU clerks make 5 -6 dollars less than a USPS employee, APWU President made a back room deal, we will vote out all NBA's and others who voted for this Sham of a contract, an illegal strike would be better, Cliff Benedict Arnold Guffey is a traitor to the true Union principles, USPS has lied about finances, 7,500 Management to be laid off or Early retirement incentives, the tip of the overpaid management who rise through the ranks under someones desk, like the Buffalo Bison Burns and Neddy.

Anonymous said...

So if they have a 40-50% turn over just how many people get retirement? How much mail or packages does UPS and FedEx do per week and what numbers does the Post Office have? Lets compare apples to apples.
Do you count management in your salary cost and benefits like the PO does?

Anonymous said...

Hey Douglas, in case no one pointed it out yet, the article said that UPS regular employees pay 0% for health benefits!

Anonymous said...

Douglas ... another dumb postal person who can't read!

G-man said...

Im fed ups with this whole thing
who cares.....G-man

Top Dog said...

Comparable wages? How about comparable risk like in ANTHRAX or TERRORIST PACKAGE? Just leave all that out and focus on the workers while FORD motor CEO is getting 45 Million is stock options. 45 MILLION For one person. Yea right.

Robert said...

The posted rates are for UPS "Feeder Drivers". Feeder Drivers are Class A CDL drivers that drive tractor trailers from hub to hub. It's the highest rate UPS pays and these jobs are usually held by the most senior employees. Unlike USPS and it's multiple unions, UPS employees start as indoor sorters and loaders (lowest pay most physical jobs) then they can bid to the higher paying package car driver (equivalent to USPS mail carrier) and ultimately to feeder driver positions(highest pay least physical job).

Anonymous said...

I don't know where half this info comes from i am a full time usps carrier I make a lot less than those hourly wages listed i have the worse health insurance i've ever had in my 35 years of working and I pay approx 30% of the premium. My retirement is only slightly above private industry, im talking 1% And I work my butt off earning every penny