Attrition of Employees over 50
Attrition of Postal employees over 50 comes from retirement, death, and voluntary and involuntary separation from the Postal Service Early retirement incentives were offered to different groups of employees in 2009 and 2011. So the attrition rates below include the impact of these incentives.
Regarless of the reason an employee over 50 left the Postal Service, about 27% of the Postal Service employees over 50 in 2008 had left by 2011. Similar percentages for over 55, 60 and 65 are shown in the following table.
|Comparison for Pay Period 18 for 2008 and 2011|
Assuming that the Postal Service offers similar incentives to eligible employees, it should see a reduction in full time career employee among employees who are 50 or older today by around 94,000. The Postal Service should see total full time employee count by 100,000 if those under 50 leave Postal Service employment at historical levels. This quick analysis confirms Postal Service statements that it would have to lay off at least 120,000 employees in the next few years as it restructures its service.
The Importance of Early Retirement Incentives
By looking at one-year attrition rates, the importance of incentives becomes clear. Attrition rates of those over 50 rose between 2009 and 2010 reflecting the impact of the early retirement incentives for 150,000 employees that went into effect in the fall of 2009. As could be expected attrition rates fell in 2010-2011 as early retirement incentives pushed up retirement by a year for some employees.
Attrition rates for employees over 65 appears to suggest that the incentive may have had a real impact for these workers as it induced more retirements than would otherwise occur without having much impact on retirement decisions of employees who continued to work after the incentive expired.
Attrition rates for those between 50 and 60 actually dropped after an early retirement incentive was offered which suggests that the incentive may have only had the effect of convincing employees who were likely to leave for other employment to leave a year earlier and may not have had much of an impact on the number of Postal employees in that cohort over a longer period.
|Comparison for Pay Period 18 for 2008 through 2011|
If this estimate is correct, offering early retirement incentives could boost attrition rates for those over 50 by 3%. If these incentives were offered to all Postal Service employees over 50, the Postal Service would see its employee count cut by retirements increase by around 11,000 more than it would otherwise.
Statements Implying that Cuts in Postal Service Employment Can Occur Without Pain Are Wrong.
Yesterday, the Hill reported that Representative Darrell Issa stated on the Morning Joe on MSNBC,
"You can get the 200,000 or so excess workers off the payroll without having to use punitive measures."In the same interview, Mr. Issa talked about forced retirements and implied that a forced retirement was not a punitive retirement. Even if you accepted that forced retirements did not violate age discrimination law and was not a punitive measure, forced retirement of Postal employees would still require a significant number of layoffs.
If one assumed that every employee over 65 could be forced to retire, then forced retirement would cut Postal employment by 17,000 more than normal attrition. If one assumed that every employee over 60 could be forced to retire than forced retirement would cut Postal employment by71,000 more than normal attrition. So forced requirements would still require layoffs of between 50,000 and 100,000 employees.
Cutting Postal Service Employment by 220,000 Requires Major Service Change
Cutting Postal Service employment by 220,000 requires that it cut its processing capacity, the number of delivery days and retail network significantly. These changes reduce service levels for both individual and commercial mailers retail customers is affected depends on the effectiveness of the Village Post Office concept and other efforts to switch retail services to franchisees and contractors.
The changes in service standards and delivery days represent a change in the Postal Service's universal service obligation. The changes in service standards represent a change in what the Postal Service promises its customers and do not reflect a specific obligation set in law. The change in delivery days represents a specific legal obligation that can be considered to be part of the Postal Service's universal service obligation.
The Postal Service's service standard obligation is similar to common carrier obligations that FedEx and United Parcel Service have to meet published delivery standards. Therefore this obligation can be changed at will by the carrier who is only obligated to provide the service that it promises. So technically the change in the service standard could be argued is not a change in the Postal Service's universal service obligation as it is a change in its common carrier obligation. Either way, the change in standard is a reduction in the Postal Service's commitment to its customers.
Congressman Issa in his interview stated that "Universal service is part of the [Postal Service's] mandate, and we think that's extremely important." As cutting employees would require changes in delivery days and service standard, Congressman Issa's understanding of the Postal Service's Universal Service Obligation does not appear to be fixed with the obligations that now exist.
Cutting 228,000 Postal Service full time jobs will eliminate jobs of people who wish to continue working. As forced retirements are most likely illegal, the Postal Service will have no choice but lay off 120,000 to 130,000 employees over the next few years.
In order to cut this number of employees, the Postal Service needs to change its way of doing business. Retail services will need to be increasingly performed by contractors and franchisees. Days of delivery would need to be reduced. Service standards would have to be relaxed. The latter two changes represent a major change in the Postal Service's commitment to its customers and a change in the understanding of the Postal Service's universal service and common carrier obligations.