Compensation Comparison Chart

Thanks to my readers I was able to create a chart comparing Postal Service compensation to compensation at FedEx Express and United Parcel Service.  As all readers know FedEx Express is non-union UPS is organized by the Teamsters and the Postal Service is organized by one of four craft unions.  The Postal Service compensation figures are from 2009 and were provided by the Postal Service to reporters prior to beginning of negotiations with APWU and NRLC.

The comparison's are a bit disingenuous for the APWU includes a number of maintenance crafts that are higher paid then the most employees that sort mail.  Therefore a fairer comparison would compare the average compensation of employees that sort mail or work at a retail counter with the wages paid UPS and FedEx inside workers.   

The comparisons illustrates why the compensation levels negotiated with the APWU for new employees and non-career positions have much lower wages.   It is clear that the new wage structure should bring APWU members that sort mail or work a retail counter to an average compensation level that will fall between what FedEx and UPS now pay.   If one assumes that UPS and FedEx employees see increases in compensation in the next few years, either due to contract provisions or increases reflecting improving business at both firms, then it is possible that by the end of the contract, APWU average compensation will likely be closer to what FedEx will pay its employees than what UPS will.

In many ways, Mailhandler union members face a worse comparison that APWU members.   Few of their employees are in maintenance and other positions that generate higher salaries.   Therefore, their average salary is likely further above market rates than APWU members.   Therefore, the contract that they will negotiate next fall will likely have all of the changes in work rules and pay schedules that the APWU just agreed to.  They may find it more difficult to negotiate any protections for current employees that the APWU did.

For members of the NALC and NRLC unions the comparison is a bit more complicated.   Their current compensation falls between UPS and FedEx compensation levels.   However, Postal Service is seeing its volumes decline while UPS and FedEx volumes are growing.  Also determining what is a fair wage for the delivery portion of the service depends on an estimate of the value of the delivery service alone and the division of revenue for all activities other than delivery and delivery.   Only after that is conducted would it be clear whether the compensation paid to Postal Service carriers is at, above, or below market rates. 

The difficulty of doing a comparison with compensation of the NRLC members most likely explained why the NRLC was not willing to continue to negotiate.  They most likely face a lower risk of an adverse ruling in arbitration than APWU members as the economic case of the Postal Service is much more complicated in that negotiation.

Comments and suggested additions to this table are requested.   They will be added to the table and posted when received.

Time for Mailers to Stand Up

These are hard times.   Over 15 million Americans are out of work, and over 6 million have been out of work for more than six months.   When the economy is tough, foodbanks become the primary source of food for thousands of people who do not have the resources to feed their families.  Living without is toughest during the Christmas season when all media is saturated with advertising encouraging spending.

One of the greatest programs to help provide food for the poor has been the National Association of Letter Carriers food drive.  For 18 years letter carriers have collected non-perishable foods from households which have gone a long way to fill the shelves at foodbanks.  This program has become so successful, that alternative sources of donations could not fill foodbank shelves without the National Association of Letter Carriers and sponsors that promote the food drive.

Unfortunately, in upstate New York the food drive was canceled this year due to the lack of a sponsor to promote the drive.   The Utica Observer-Dispatch reported that "corporate underwriters pulled funding in 2008 that was used to purchase about 1.5 million postcards used to notify residents about the food drive."  In 2009, the drive was held without sponsorship but collections dropped by 87.5%.   "Carriers in Rome, New York, had annually collected about 8,200 pounds of food. In 2009, when no notices were mailed, those carriers collected about 1,000 pounds.", Maureen Marion, a Postal Service spokeswoman told the reporter for the paper.

Without a sponsor, only word of mouth was available to promote the 2010 drive.   Given the lack of success in 2009 without postcards and other publicity, trying to do it this year was deemed futile so the food drive was cancelled.

Now how much money is needed to get this drive back in business? To tell the truth, I have no clue.   But I am sure there are many people who read this blog who know to the penny how much it would cost and might even have some idea regarding how much it would cost to reinforce the postcards with the use of web based advertising and social media.    Could there be a better advertisement for mail than a concerted campaign to use mail in conjunction with other media to feed the hungry? 

Time is short to get something going but I am sure the letter carriers in upstate New York would be glad to make the extra effort to collect the non-perishable food even during this heavy mailing season as they had done for the previous 18 years.  Who among the readers of this blog is willing to the get this food drive restarted in upstate New York.  

President Obama and 6 Day Delivery

Both the National Association of Letter Carriers (NALC) and American Postal Workers Union (APWU) report on their respective websites that President Obama supports 6-day Delivery.   Both postal unions use the following line from the 2011 budget that President Obama presented to Congress to support their argument that President Obama supports 6-day delivery.   "That 6-day delivery and rural delivery of mail shall continue at not less than the 1983 level."

If this line implies that President Obama supports 6-day delivery, then it is a peculiar way to say it given that it is written in a form that follows the legislative language written by Congress.  The language is similar in structure to language in the budget that describes provisions relating to child support enforcement, and closure of small rural post offices.  The identical language is in the budgets of President Bush. 

More likely, this language is nothing more than a statement of the law relating to uses of the Postal Service Fund and Congressional appropriations to that fund.   So in fact, rather than a statement in support of 6-day delivery by President Obama, this line is nothing more than a restatement of the law as passed by Congress

So if President Obama has not staked a position in regards to 6-day delivery, what does the budget say about its position in regards to Postal Policy.    The only indication comes from the language in the budget that was not part of 2010 budget submitted by President Bush.

The Postal Service faces a serious financial crisis due to unprecedented reductions in mail volume. These reductions, in turn, reflect greater reliance on the Internet (a.k.a., "electronic diversion") and the effects of the business cycle, including cost-cutting by businesses and consumers during the recession. The Administration will work with the Postal Service, its employee unions, the Congress, and other stakeholders to make sure the Postal Service has the tools and authorities it needs to remain viable as a pillar of the American economy and a vital public resource through the current crisis and over the long haul.

This statement does nothing more than state that the Obama administration plans to work with all postal stakeholders to ensure that it remains viable over the long haul.   This statement provides no indications if President Obama's positions on postal policy are similar to those of any stakeholder.  At best all stakeholders, including the APWU, or the NALC, can expect that they will have a seat at the table as more serious discussions about the future of the Postal Service begin this Spring.

Job Cuts or Wage Cuts

According to Hellmail, TNT, the Netherlands postal operator, and its unions are expected to agree to a new offer for its contract soon. The agreement results in pay cuts of between 2 and 3.5% and layoffs of less than 1,000 employees. Much of the pay cuts will come from a proposed reduction in Sunday pay.

Prior to the agreement TNT had placed on the table the possibility of laying off 11,000 employees. This proposal was made after the Union had rejected a 15% pay cut in March, 2009.

The driver behind the contentious negotiations is the rapid drop in mail volumes at TNT. TNT like all postal operators have been hurt by both a severe recession and declining demand due to electronic competition.

TNT's contract may present a framework for upcoming negotiations that the United States Postal Service have with their unions. The Postal Service faces similar economic and competitive challenges to what drove TNT to offer sizable pay cuts, threaten massive layoffs and eventually agree to modest layoffs and small cuts in pay.

The Postal Service differs in that it has not previously made as extensive an effort to streamline and optimize its network and has less flexibility in the use of full-time and part-time employees. Therefore it enters the upcoming round of labor negotiations needing significantly more contract changes that what TNT was willing to accept. Without binding arbitration, the US postal unions and the Postal Service, just like TNT and its unions, would have to make the choice between cutting jobs and cutting real compensation levels.

With binding arbitration, the outcome is less certain. However, given the difficulty of selling eliminating long-standing contract provisions to their members, postal unions and the Postal Service are likely heading toward an arbitrated contract agreement where an arbitrator will be asked to make the choice between jobs and compensation.