Postal workers union breaks off labor negotiations

It's not a very holly-jolly time at U.S. Postal Service headquarters. On Wednesday another union broke off contract negotiations and the agency is now heading toward binding arbitration.

The American Postal Workers Union (APWU), the agency's largest union representing about 355,000 postal clerks, maintenance employees and motor vehicle operators, called off negotiations at midnight Wednesday. The union has been operating without a contract since Nov. 20.

APWU joins the National Rural Letter Carriers Association as the second union this month to declare an impasse and walk away from the negotiating table. Postal Service unions, similar to other federal unions, cannot strike. If the two sides fail to reach a negotiated settlement, they head to mediation and fact-finding proceedings and, if unsuccessful, end up in binding arbitration.

In a bulletin to members, APWU Executive Vice President William Burrus put the blame squarely on Postal Service officials, stating, "These negotiations have failed because management's wage proposal, dictated by the Postmaster General and the Board of Governors, is not only inadequate, it is shameful and insulting to postal employees."

The union was seeking a 13.5 percent wage increase over three years. According to Burrus, Postal Service negotiators did not offer a wage increase. Postal Service officials did not return calls.

"We all knew this was going to happen," says Robert McLean, executive director of the Mailers Council, a coalition of mailers and trade associations. "Once the letter carriers received [their] increase we knew that APWU would ask for more. We knew the Postal Service would not be able to meet that."

Last year, a federal arbitrator awarded the National Association of Letter Carriers a 3 percent pay hike. The raise puts letter carriers on a higher pay scale than mail clerks for the first time since 1907.

The Postal Service is also negotiating with the National Postal Mail Handlers Union. Contracts with the mail handlers, clerks and rural carriers expired two weeks ago.

Breakdowns in contract negotiations come at a bad time for the Postal Service. The agency lost money in fiscal year 2000. Agency officials predict losses totaling $480 million this fiscal year. If an arbitrator boosts union wages, the Postal Service could see losses climb higher in future years. Labor accounts for nearly 80 percent of the agency's costs.

"We are disappointed and concerned about the implications for increases to postal costs," McLean says. "Arbitration could substantially increase the Postal Service's costs and thus increase postal rates--again."

The Postal Service's Board of Governors is expected to approve a 4.6 percent across-the-board rate hike at its meeting next month. Postal Service observers worry that successive years of runaway costs and declining revenues will lead to yet another rate hike.