Postal Service proposal to break contracts blasted by unions

From The Washington Post:

Unions reacted furiously Friday to a proposal by the Postal Service to lay off 120,000 workers by breaking labor contracts and to shift workers out of the federal employee health and retirement plans into cheaper alternatives.

Labor experts and other unions also sounded the alarm that any move by Congress to break postal contracts would further wound an already ailing labor movement, much as President Ronald Reagan’s firing of striking air traffic controllers did in 1981.

Although the postal unions enjoy collective bargaining rights beyond those of regular federal workers, other unions said the proposal could set an economy-wide example at a time when organized labor is under pressure from cost-cutting governors and employers.

Postal workers have made many concessions to lower costs in an age of dwindling mail volume, postal unions said. The service’s real problem, they said, is that Congress in 2006 stuck it with the requirement that it pay, over 10 years, enough to cover the cost of 75 years worth of future retiree benefits — at a cost of more than $5.5 billion a year.

Legislation to lessen that burden, as well as a request to save $3 billion by eliminating Saturday service, is stalled in a divided Congress, leaving the service deep in the red with the next big retiree health payment due in seven weeks.

“Do I hold out hope that Congress can do anything? No,” said Cliff Guffey, president of the American Postal Workers Union, one of four postal unions. “It’s the same group that almost brought this country to collapse over the debt ceiling.”

The Postal Service’s proposal is the latest turn in an increasingly urgent battle over what to do with a storied institution that is struggling with stiff competition, declining demand in a digital age and a conflicted identity.

Since 1970, the Postal Service has operated as a quasi-private monopoly that receives virtually no taxpayer support but is hamstrung in competing with companies like FedEx and UPS because it cannot raise prices above a certain level, must maintain minimum levels of service and must now make the annual retiree payments.

Experts said the proposal to break open labor contracts was probably a negotiating stance to force Congress to take action in loosening the service’s constraints. Agency spokesman David Partenheimer said as much in a statement Friday night.