As if the Postal Service doesn't have enough problems, there's a new idea floating around Washington: William Burrus, president of the American Postal Workers Union, says now is the time to end mailer worksharing one of the most successful business-generating programs ever undertaken by the U.S. Postal Service. Let there be no doubt about it, he's wrong.
What Burrus proposes would require new postal laws, armies of new postal workers, higher postal costs and billions of dollars in additional postal debt. Postal volume would drop, postal revenues would crater, private-sector investment in mail preparation facilities would be devalued overnight and large numbers of non-government employees would lose their jobs.
This is a serious matter. It is serious for mailers and it is equally serious for our national economy. According to the Postal Service Transformation Plan, a functioning and viable mailstream makes possible one of every 15 jobs nationwide as well as the production of goods and services worth $900 billion. And that's why the Association for Postal Commerce and the Mailing & Fulfillment Service Association have joined together to set the record straight about worksharing.
Worksharing represents a trade: More work by mailers in exchange for lower costs. By allowing the private sector to do more addressing, labeling, sorting, bundling, packaging and dropshipping, the Postal Service has reduced its labor requirement by more than 185,000 jobs.
Why is Burrus wrong? Listed below are several facts which indicate why worksharing has become a vital part of the mailing industry:
No other nation derives as much economic benefit from the mail as the United States in fact, the Postal Service carries 46% of the world's letters and cards. Right now, worksharing saves the Postal Service more than $15 billion a year. A study by four PRC economists Robert Cohen, William Ferguson, John Waller and Spyros Xenakis, found that, "In 1999, the total cost savings from all worksharing activities was $15.3 billion or nearly one quarter of total Postal Service costs of $62.2 billion." This is what has made the US mail system so successful.
End worksharing and you would need a vastly larger Postal Service. How large? According to the PRC economists, an end to worksharing would require an additional 187,000 workers a 22% increase.
Under the Postal Reorganization Act of 1970 (Section 3622), when recommending rates, the Postal Rate Commission must consider "the degree of preparation of mail for delivery into the postal system performed by the mailer and its effect upon reducing costs to the Postal Service." In effect, to end worksharing, it would be necessary to revise the law under which the Postal Service has operated for the past three decades.
The Bottom Line
Each year, more than 200 billion pieces of mail are delivered nationwide, a crucial fact of economic life. Without a safe, secure and financially stable universal mail delivery system, goods and services worth more than $900 billion as well as one of every 15 American jobs would be at risk. The Postal Service has liabilities of $115 billion, an eroding customer base, declining volume in key sectors and a "monopoly" which holds less value each day. Does anyone really think that things will be better for the Postal Service if it charges more and offers less?
One might ask: If the Postal Service fails, who will repay its debt? Will today's postal workers be able to find jobs in the private sector with the premium wages they now receive? Will mail deliveries be reduced to four days a week? Or three? Will local post offices close? What will happen to the businesses, charities, political parties and associations that rely on the mail system to deliver their ads, parcels and communications?
The Postal Service has been facing tumultuous times. Mail volumes in key postal sectors have suffered declines from years past, and electronic communication technologies, private sector competitors and other factors have ushered in a competitive marketplace in which the Postal Service finds itself particularly ill-equipped. According to the General Accounting Office, the Postal Service is suffering with a business operating model that simply cannot work, and the Comptroller General and the Postal Service's Board of Governors have called on Congress and the Administration to change the legislative charter on which the nation's postal system is based.
At the very heart of the Postal Service's dilemma is a sizeable obligation that, for the most part, can be rightly termed "labor-related." How better to deflect whatever criticism might befall labor than by trying to hoist the responsibility for the current postal fiscal crisis into the laps of mailers?
Some postal employee groups are beginning to shudder at the thought that a Presidential Commission might question the structure and operation of today's Postal Service, and that it might possibly decide to drastically revise its organizational and governance structure. In short, it may produce a significant change in the dynamics that have long governed organized labor's relationship with postal employees to the unions' disadvantage.
There's an old saying that "all politics is local." The prospect of postal legislative reform may make some union politics about as local as it can get. Mailers and mailer worksharing make tempting scapegoats. The only trouble is that the big lie didn't work in the 20th century, and, when brought to the light of day, won't work in the 21st.
The current postal situation is challenging enough. What's needed is responsible leadership to work concertedly for reasonable solutions. The last thing we need is political grandstanding on an issue that has no substance.
Gene Del Polito is president of PostCom, a national association of businesses and organizations that use or support the use of mail as a medium for business communication and commerce. He is highly regarded within the postal community as an effective advocate on behalf of those who use mail for business communication and commerce. Gene has received PostCom's Lee Epstein Award, the Mail Advertising Service Association's Miles Kimball Award, the Direct Marketing Club of New York's Mal Dunn Leadership Award and the Greater Washington Society of Association Executives' Monument Award for Excellence in Communications. Gene serves on the Postmaster General's Mailers Technical Advisory Committee and has been a member of a number of Postal Service-industry work groups and task forces over the years. He's been a frequent speaker at postal gatherings and conferences around the nation. For additional information or to contact Gene, visit www.postcom.org.