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USPS and American Postal Workers Union Reach Tentative Contract Agreement

NPES and its Coalition for a Twenty-first Century Postal Service (21C) mailing industry allies testified before the House Subcommittee on Federal Workforce, U.S. Postal Service and Labor Policy chaired by freshman Congressman Dennis Ross (R-12-FL) during hearings held by his panel on March 2. This was the first hearing in the House of Representatives of the 112th Congress on the precarious financial situation, both short and long-term, of the United States Postal Service (Postal Service or USPS). Other witnesses were new Postmaster General Patrick R. Donahoe, Postal Regulatory Commission Chair Ruth Goldway, and Fredric Rolando, President of the National Association of Letter Carriers.

Represented by spokesman Arthur Sackler, 21C stated that the Postal Service “remains an indispensable medium of commerce and communications in the 21st Century . . . [and] is the last link of a chain of distribution for . . . a nearly $1 trillion industry that employs more than 7.5 million people.”

21C’s testimony underscored that there is far more at stake than just the Postal Service itself, citing the future of a mailing industry roughly fifteen times the size of postal revenues, the huge number of jobs it supports – many of them small business jobs - and the substantial impact that the mailing industry has on the economy as a whole.

Moreover, 21C’s comments stressed that USPS insolvency, which could occur as early as September 30 without congressional action, may well have consequences not only for the Postal Service but also for the nation, sending a terrible economic signal to markets around the world.

To avert this immediate calamity, 21C called for a reduction in the Postal Service’s $5.5 billion per year payment to its Retiree Health Benefits trust fund mandated by the 2006 Postal Accountability and Enhancement Act (PAEA), and a “repatriation” of the USPS’s $50 billion plus overpayment to the Civil Service Retirement System (CSRS) and Federal Employee Retirement Benefit Fund, which is actually excess postage paid by ratepayers over many years. There was universal agreement among all the witnesses on these two points.

In addition, 21C advocated a number of structural changes to the Postal Service’s business model needed for its long-term viability. One of those changes is a more economically realistic and sustainable USPS workforce compensation and benefits package going forward.

In that Regard, not long after the hearing the Postal Service and the APWU (American Postal Workers Union) announced a tentative labor agreement that will be effective upon ratification by the 205,000 APWU members, which is expected to take place by May.

The four-and-a-half-year contract, which would run through May 2015, would give the Postal Service some new cost savings and increased flexibility to its operations by setting lower salary levels for new workers, and a new category of non-career employees. But the agreement also provides a 3.5 percent pay increase over the life of the contract in addition to cost of living pay hikes, and retains protection against layoffs for career employees on the payroll as of November 20, 2010, the latter provision being deemed the most important part of the new agreement according to APWU President Cliff Guffey. However, these latter provisions are also economically very problematic given the continued sharp decline in mail volume, and the Postal Service’s ongoing budget deficits.

The APWU agreement comes after negotiations with the National Rural Letter Carriers Association reached an impasse, and before contract talks with the National Association of Letter Carriers, and the National Postal Mail Handlers Union, which will begin soon.

For more information contact NPES Government Affairs Director Mark J. Nuzzaco at phone: 703/264-7235 or e-mail: