Postal clerks and letter carriers, who comprise the nation's largest civilian work force, begin bargaining today with the U.S. Postal Service on a contract that is expected to touch on the major pillars of postal life: wages, health care benefits, work rules and how humans interact with automation.
"Without a doubt this is the most significant negotiations we've ever had," said Joseph J. Mahon Jr., assistant postmaster general for labor relations, the service's chief negotiator.
"We'd like to reach an agreement that is fair," said Moe Biller, president of the American Postal Workers' Union. The other union is the National Association of Letter Carriers. Together they represent about 600,000 employees.
Such a low-key statement from Biller is rare. The old-line union leader has called recently for Postmaster General Anthony M. Frank's resignation and in an interview yesterday took sides against every major initiative or policy shift Frank has advocated in the past few years.
The contract expires Nov. 20. Postal workers are prohibited by law from striking.
The negotiations occur while the postal service in a major transition from being a labor-intensive processing center to one that is considerably automated, with machines sorting, coding and delivering mail within its vast plants. The service spent $5.3 billion on automation and mechanization in the last decade and plans to spend another $13 billion in the coming five years.
At the same time, mail volume, the major source of postal revenue, has dropped slightly after a steady climb in the 1980s. Private sector competition has wooed away customers from some of the most lucrative portions of that mail volume -- parcel post, overnight and some international delivery.
Meanwhile, the hierarchical work force structure, rigid union work rules and inflexible managerial practices have hindered the service's ability to adjust to automation, declining volume and increased competition.
The postal service has applied for a rate increase that will push the cost of mailing a first-class letter from 25 to 30 cents. The request, on average, would result in an increase for all postage of about 19 percent.
Earlier this month, Frank claimed a bittersweet victory of sorts: that the service expected a less than $1 billion deficit this year, less than the previous projection of $1.3 billion.
With labor costs accounting for 83 percent of the postal service budget, Frank's strategy for paring the deficit hinges on whittling away at that figure.
The major areas of contract negotiations, according to the participants, include:
Wages: The average annual salary for a letter carrier or clerk is $28,984, plus $8,170 in benefits.
Biller said yesterday that, "we'll be looking at a substantial increase" in wages. The postal service's Mahon said "we will be coming to the table trying to restrain the unions' " wage demands.
Health Care. There has been a 136 percent increase in the cost to the postal service of providing health care coverage to its employees over the last three years. The unions, said Biller, would like to augment the coverage members gets from the agency, while the postal service is looking to cut health costs.
Mahon said the service will be asking unions to consider "a different system" than the one it uses now.
Work Rules. One of Frank's favorite themes throughout his tenure has been the need to change the way work is done. He wants to be able to hire more part-time and temporary employees -- currently held at 10 percent of the work force, although the APWU says it actually employs a temporary force closer to 26 percent.
Frank also wants more flexibility to be able to move employees whose jobs are made redundant by automation quickly to other jobs. The unions, said Biller, believe there is already enough work force flexibility, that it is management that needs to be more flexible and that retraining for workers should be improved. Biller said the service has failed to make adequate long-term plans for the relocation of workers displaced by automation.
Contracting Out. Frank announced in July that the service planned to contract out 12,000 jobs made possible through a new technology -- the Remote Bar Coding System -- at a savings of about $11 an hour per employee.
The APWU, Biller said, is bitterly opposed to the use of outside employees for the task of encoding and believes Frank already employs too many contract employees for jobs that should be done by union members.
The postal service, with more than 800,000 employees, handled 40 percent of the world's mail volume on a $39 billion budget in the fiscal year ending Sept. 30, 1989. It processed 161.6 billion pieces of mail last year through its 40,031 post offices and branches, according to the postal service.