Union members ratify USPS cost-cutting wage deal

The world’s largest postal union has ratified a new 4.5-year collective bargaining agreement with the US Postal Service. Almost three times as many members of the American Postal Workers Union were in favour of the labour deal as against, despite pressure from some quarters to vote against the contract – not least from past APWU president William Burrus.

More than 50% of the APWU membership returned their postal ballots by yesterday’s deadline, with counting today revealing 69,451 in favour and 22,351 against.

The new agreement, which took months to negotiate after the last agreement ran out in November, is set to run until May 20, 2015.

The deal includes a number of changes to working arrangements designed to help with the USPS financial difficulties. An agreed 3.5% wage rise and cost of living adjustments are set to be deferred two years to give the Postal Service breathing space in its cash flow, while new employees at the Postal Service will start on lower wage grades.

It also allows the Postal Service more flexibility in how full-time workers are used, and more scope to use part-time and temporary workers, who can be sent home when not needed, in order to keep down staff costs.

However, for the union members the contract also means protecting their jobs, bringing some outsourced work back in-house and limiting the practice of “excessing” – where workers are redeployed in different crafts or in locations far from their homes.


APWU president Cliff Guffey said today that the contract was an “important achievement”.

“We were able to retain protection against layoffs, bring back thousands of jobs in each craft, and limit excessing,” he said.

“The agreement includes many big changes, and I realize that some union activists are apprehensive,” Guffey added.“With help from the national union, I am confident that locals can implement the new provisions and protect the rights of APWU members.”

The American Postal Workers Union represents around 220,000 USPS workers and retirees – mainly clerks and maintenance staff as well as employees in vehicle and support services divisions.

Its latest collective bargaining agreement is set to provide a template for other union negotiations. As the USPS seeks new deals with the city and rural carriers’ unions, Postmaster General Pat Donahoe has said he will look for the same kind of worker flexibility agreed with the APWU.

Speaking to reporters last week about the APWU deal, Donahoe said the union’s president had been “very courageous” in negotiating a deal that recognised the financial difficulties at the Postal Service.

Donahoe said of the deal: “We think that we’ve got a good formula with the APWU. The bottom line is we have got to increase our flexibility and reduce labour costs.”

Cash shortfall

With mail volumes declining 20% since 2006, the US Postal Service is facing a $2bn to $3bn cash shortfall this year, with predictions that its multi-billion dollar annual losses will run into the $15bn borrowing limit set by Congress unless changes are made.

With labour representing 79% of the Postal Service’s operating costs, it has been a key target for cost-cutting efforts. USPS has claimed the APWU contract will save $3.8bn in costs.

Donahoe, who is currently preaching a “leaner, smarter, faster” message for the Postal Service, ultimately hopes to slim down his work force from the current 570,000 to around 400,000 in response to declining mail volumes. The USPS work force has already shrunk by 130,000 in the last three years.

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