April 28 2014
Jillian Kay Melchior
Hundreds of mail workers protested last week at 56 Staples stores in 27 states. Their claim was simple: that a new U.S. Postal Service partnership with the office-supply store threatens their jobs. They’re right — but instead of going postal at Staples, USPS employees should examine the union policies that pushed them to this precarious position.
The Postal Service is in woeful financial shape — so much so that in November of last year, a whopping $5 billion loss was heralded by the New York Times as a “significant improvement.” To their point, in 2012, the Postal Service lost $15.9 billion, and it has experienced net losses for the past seven years in a row. In the past three years alone, the Postal Service has seen a mind-blowing $25 billion in losses.
Labor costs account for much of that red ink. The Postal Service is “by far the largest government enterprise in terms of employment,” according to the Congressional Budget Office. Wages and benefits account for nearly 80 percent of the Postal Service’s total expenses.
By the Bureau of Labor Statistics’ estimates, postal workers earn between 93 percent and 148 percent more than their similarly skilled counterparts elsewhere in the economy. And postal workers are getting pay raises, too. Their most recent contract, which extends through 2015, guarantees 3.5 percent annual pay hikes, as well as expanded protections against layoffs.
Of course, the Postal Service’s hemorrhaging is also the result of declining demand for snail-mail communication in the age of the Internet. In 2013, the Postal Service moved 3 billion fewer pieces of first-class mail than it had in 2012.
Precisely because the mail market is changing, the Post Office must innovate and cut costs if it’s going to survive. The Staples partnership is a good step in this direction. It allows the office-supplies store to sell stamps and offer limited mail services and package delivery.
Consumers benefit from having more options, and the Postal Service may also save, if a recent internal memo is any indication. The memo estimated that private-sector retailers could offer the same mail services for less than a third the cost, which gives a bracingly clear picture of how inflated mail workers’ pay has become. The memo also added that “the [Staples] pilot will be used to determine if lower costs can be realized with retail partner labor instead of the labor traditionally associated with retail windows at Post Offices.”
The president of the American Postal Workers Union, Mark Dimondstein, responded with a fit of pique. “As a nation, we need to decide what kind of Postal Service we want,” he said in a news release. “Are we going to have a modern, public mail system that serves all of the people, or are we going to let privatizers kill this great institution?”
That argument should be returned to sender. Demanding more than the Postal Service could afford, unions created an unsustainable financial situation that put the entire operation in jeopardy. Now unions are attempting to prevent any meaningful attempts at financial reform. And if they succeed, mail workers will have their labor bosses to thank for the demise of this once-great institution.
— Jillian Kay Melchior writes for National Review as a Thomas L. Rhodes Fellow for the Franklin Center. She is also a senior fellow at the Independent Women’s Forum.