Slouching Toward the 43-Cent Stamp


With the Persian Gulf dominating the news for the past six months, it's not surprising that scant attention has been given to a quiet process which will affect virtually everyone in the coming years -- the process of determining the cost of mail service. Last week, the first round of contract negotiations between the Postal Service and its union employees ended in a modest victory for postal customers.

First a bit of background. At about the same time that Iraq grabbed Kuwait, negotiations quietly began between the Postal Service and the three unions which represent 660,000 workers. After haggling through the summer and well into the fall, the negotiators reached an impasse when the unions held fast to an exorbitant demand -- a 35-hour work week, a 22 percent pay increase over three years, and large increases in pensions and other benefits for workers who already make on average $37,154 a year in wages and benefits -- significantly higher than &r; comparable workers in either the private or public sectors, including teachers and police officers.

In order to pay for increases of this magnitude, the Postal Service estimated, the price of a postage stamp would have to be increased from 29 cents to 43 cents over the next two years. This 48 percent increase in the cost of mailing a first-class letter would come, mind you, at a time when Baltimore city workers just voted to forgo promised wage increases in order to avoid layoffs; when Maryland state workers are being asked to work longer hours with no pay increase; and when public employees even in well-heeled Howard County face layoff.

The breakdown in negotiations in late November triggered the legal mechanism of binding arbitration before a board consisting of one member appointed by the Postal Service, one by the union, and a third member chosen by the two.

The first contract which went to arbitration involved the smallest and weakest of the three postal unions, the National Postal Mail Handlers Union, whose 50,000 members do the grunt work of unloading trucks and carrying heavy mailbags inside the post offices. After studying the matter behind closed doors for the 45-day period provided by law, the arbitration board mandated a lower entry-level wage of $19,171 for all new hires -- and further mandated that the wage remain at that level for 96 weeks. Even that lower wage, of course, is considerably above the wages paid for comparable work in private or other public sector work.

This two-tiered arrangement is not the best solution, because it means that for nearly two years a new worker who is, say, 22 years of age will be making a good deal less money than a 60-year-old worker in a job that requires only muscle, not skill or experience. Eventually such an arrangement produces severe morale problems and inefficiency within the work force.

But at least the two-tier mechanism represents a start in the battle to hold postal wages -- and hence the cost of stamps -- below the rate of inflation, and if that principle can now be applied to the next rounds of arbitration, we might avoid the 43-cent stamp that the Postal Service says could be in our future.

Arbitration boards have just begun consideration of the contracts which will cover the two remaining unions, which represent more than 600,000 postal workers. In each case, three individuals will make determinations of enormous consequence -- and yet they are accountable to no one.

It is precisely this lack of accountability which should have been foreseen when the Postal Service was created as a "public corporation" 20 years ago under President Richard Nixon. Such entities tend to be neither fish nor foul -- not subject to the constraints of market competition to hold prices down, because it is a government-protected monopoly, and yet not subject to political constraints, because the service is ostensibly independent.

Viewed in that context, it was inevitable that the managers of the Postal Service over the years would buy labor peace by giving the unions practically anything they asked, knowing that the higher labor costs would be paid through higher stamp costs over which the customer had no control; the result has been 20 years of postal worker wage increases that ran considerably above the overall inflation rate.

Certainly you can't blame the union leaders for seeking to keep the largess flowing; that's what they are elected by their members to do. But in today's communications market, a huge pay increase for postal workers inevitably followed by a huge postage-rate increase could be self-defeating even to the long-term self-interest of the postal workers. With the growth of private messenger services, computerized mail delivery and fax delivery, not to speak of lower-cost long-distance telephone service as a result of deregulation and competition, the Postal Service could easily become the dinosaur of the 21st century.

Maybe the best thing that could come out of this negotiation would be to give the unions everything they ask -- plus the 43-cent stamp necessary to pay for it. That result very likely would lead either to (1) a full privatization of the Postal Service placing it on a competitive footing with other delivery systems, or (2) a return to the congressional control that existed before Richard Nixon fixed something that wasn't broken.

Ray Jenkins is editor of the editorial pages of The Evening Sun.

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