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Leaving Postal Workers Behind
By T.L. Righter, 30 December 2004
"This country is prosperous. We're going to be more prosperous, but we don't want anybody left behind. No child should be left behind in the education system; no worker left behind because we haven't created a flexible system in order to get skills, nobody who needs love left behind. Government can't make people love one another, but we darn sure can encourage people who love to reach out to a neighbor in need."
- President George W. Bush, Closing Remarks at Owens University, January 21, 2004

George W. Bush's "no worker left behind" mantra rings hollow for some Americans, and for some critics of the president's economic policies. Some of the criticism is unjustified. The 9/11 attacks were a trillion-dollar hit on the economy, and even with that hit, the economy was not one of the major issues of the 2004 presidential election. Some of the criticism is arguable at best. (Textile jobs going offshore? Let someone else make cheap clothes. United States core competencies should be in higher-wage high-tech!) But for rank-and-file employees of the United States Postal Service, it appears that the criticism is justified, seeing that the Bush Administration is ready to leave many postal workers behind. Postal reform bills, now before the House and Senate, are said to be "not enough" by the Bush Administration in regards to addressing (and reducing) rank-and-file labor costs.(1)

The current assault on rank-and-file wages and benefits was outlined in the U.S. Postal Service's 2002 Transformation Plan, which cited that labor costs now make up 76 percent of the Postal Service's expenses. Oddly, recommendations outlined in the plan included reducing the wages of rank-and-file employees (carriers, clerks, mail handlers, etc.), but repealing the ceilings on the wages of managerial personnel. Not surprisingly, these same recommendations found their way into the President's Commission on the United States Postal Service in 2003, and subsequently, into current postal reform legislation.

Efforts to reduce the wages and benefits of rank-and-file workers are being helped along by a consortium of magazine publishers, direct mailers and others in "big business". In the White House, this consortium has a powerful ally - "Bush Brain" Karl Rove  - who is a former direct mailer and who has very close ties to magazine and direct mail associations. For Rove and the Bush Administration, reducing the wages and benefits of postal workers would accomplish two things. First, Rove's friends in big business would see their financial prospects improve, and second, labor-friendly postal workers would see their financial prospects decrease, reducing the overall clout of Democratic-friendly postal labor unions.(2)

These efforts are contradictory, self-serving and just plain wrong!

First, take Bush's "no worker left behind" statement literally. Postal workers are federal employees in a federal government headed by Bush. I think it would be fair to say that if postal workers were to see their wages or benefits reduced then they would be "behind" from where they were. In reducing wages and benefits for postal workers, Bush would be leaving his own federal workers behind.

Second, NO ONE IS GETTING RICH AT THE POST OFFICE! There are plenty of people in the mailing industry getting rich, but postal workers are not some of those people. Consider the following compensation afforded to various peoples involved in the postal industry:

AOL Time Warner (AOL sends millions of trial offers through the mail. Time Warner sends millions of publications through the mail)
Richard Parsons, CEO: $11.88M
Wayne Pace, CFO: $5.01M
Jeffrey Bewkes, Chairman: $18.41M
Don Logan, Chairman: $9.70M
ADVO, Inc. (Direct Mailer)
Gary Mulloy, Chairman and CEO: $602,000
Capitol One (Financial services company has Negotiated Service Agreement with USPS for reduced postage rates)
Catherine West, Exec. VP: $2.59M
John Finneran, Jr., Exec. VP: $2.25M
Harte Hanks, Inc. (Direct Mailer)

Larry Franklin, Chairman: $752,000, $11.01M options
Pitney Bowes
Micheal Critelli, CEO: $5.55M
Murray Martin, COO: $3.05M
Bruce Nolop, CFO: $2.0M
Karen Garrison, Exec. VP: $1.8M
RR Donnelley and Sons (Direct Mailer)
William Davis, Chairman, Pres, CEO: $1.46M
Kenneth McBride, CEO: $368K

U.S. Postal Service Compensation

Even though Postmaster General Potter has signed off on some of this anti-worker wage stuff, I'm going to bring him onboard for the sake of the argument. Potter, the top wage earner at the USPS, makes about $171,000 a year, a ridiculously small amount when compared with the compensation afforded to CEOs of comparable organizations. At $171,000, Potter, I'm sure, is living very comfortably, but not luxuriously in the high-cost Washington D.C. area. Compare Potter's compensation to:

United Parcel Service
Michael Eskew, CEO: $1,138,815
Frederick W. Smith, CEO: $1,150,008

Now that we've established that not even the head guy at the Postal Service is getting rich, let's take a look at the pay of the hundreds of thousands of rank-and-file craft workers (carriers, clerks, mail handlers) who are targeted for reductions by the Bush Administration. Many if not most of these workers earn from $35,000 to $45,000 a year, which gives postal workers middle-class/working class status. This pay doesn't go very far, especially if a postal worker has a house note. Consider this paycheck from a letter carrier at the top pay rate:
Annual Rate: $45,282
Gross Pay (biweekly): $1,765
Fed Tax: (-$254.19)
ST Tax: 0 - (This carrier is lucky enough to live in a state with no income tax)
Retirement: (-$13.93)
Medicare: (-$25.04)
Health Insurance: (-$40.05)
Social Security: (-107.06)
NET PAY: $1306.80 (biweekly)

Besides wages, the Bush Administration is also attempting to put health benefits and retirement on the cutting table. I'll discuss health care in a minute. As for the Postal Service's 'legendary' retirement package, it's actually not as legendary as public perception would have it. For the above letter carrier, the FERS monthly annuity for 25 years of service would be $948 and a whopping $1,138 for 30 years of service. These amounts do not include a deduction for health care in retirement. (This letter carrier better start putting money in the Thrift Savings Plan!)

Many Americans (and postal workers) in the middle/working class have a few basic goals. Home ownership - the American Dream - is one of those goals. Depending on location, this may or may not be possible at the $35,000 to $45,000 range. Health care is another basic goal. As these are basic goals of Americans, they should also be the basic goals of the Federal Government. In order to support a stable and healthy society, the Federal Government needs a large middle class. Countries with large middle classes tend to be stable, peaceful, and economically secure. (Some historians believe that it was a large middle class that gave the ancient Roman Empire its underlying strength.) Without a large middle class, societies are stratified between the rich and the poor. The ancient writer Plutarch (A.D. 46 - 120) commented on the class divide, stating "when things are even there never can be war."

Currently, most career postal workers have two of their basic goals within their grasp - home ownership and adequate health care. Likewise, the federal government has met its basic goal by providing an economic climate where hundreds of thousands of postal workers are able to secure their basic goals. So why would the federal government want to take this away? Why would they want to reduce wages that puts home ownership out of reach? (Home ownership is a giant force in the American economy, from construction to the buying of appliances, furniture, lawn mowers, etc.) Why would the federal government want to take away the health benefits of hundreds of thousands of Americans? Do they have an alternate health care plan? NO!

There are a myriad of arguing points concerning this overall topic. The basic premise of the free market is one aspect. But if you believe in the free market, how can you believe that legislation is a tool of the free market? In this case, legislation proposed by the Bush Administration would artificially suppress the wages and benefits of postal workers and give the potential for financial gains to others in the postal industry. The monopoly status of the post office and the no-strike clause are other arguing points. But, touching on these points, UPS drivers, who have jobs most similar to postal employees, actually make more than letter carriers, and they don't have to work weekends!

To hear some in the postal industry, one would think that postal workers' "big pay and benefits" are a matter of charity, negotiated by evil labor unions, and this pay is unnecessarily driving up the prices of postage. In reality, the free market is in play - the Postal Service is not an island unto itself. The Postal Service must compete for workers in the general economy just like any other business. Moreover, as has been discussed in prior editorials at PostalMag.com, the Postal Service must pay workers about what they're paying now to career employees to maintain current standards of mail service.(3) Currently, mail service is more than adequate, providing the mailing industry with a mailing system where postage is absurdly cheap already. If anything, the greater mail industry should recognize what a great postal system they have and make sure that the foot soldiers are adequately compensated. It should be noted that the Postal Service is self-sufficient, and that wages and benefits are paid from postal revenues.

Overall, the bottom-line naked reason for this legislative assault on postal workers is that the big boys want to make even bigger money.

In the greater picture, Rove's tactics are further dividing America along economic and political lines and in the end will actually diminish the Republican Party's overall prospects.  Rove's tactics will only further alienate labor union members. An alternate tactic could actually expand the Republican Party's base by bringing into the fold the middle/working/labor class. Ronald Reagan was somewhat successful in this tact, gaining a crossover segment known as the Reagan Democrats.

The lesson for Bush and Rove here is that the Republican Party can gain greater ground by taking greater care of the middle class/working class. The Bush Administration, whenever it sees a segment of the economy secure middle class trappings (home ownership, health care, etc.), should work hard to preserve that status. Bush, seeing that postal workers have attained a certain degree of this status through their own hard work, should work to preserve that level, instead of tearing it down. The alternative, as the administration would have it, would diminish a percentage point of America's working middle class to lower-class level and shift health care costs from a self-supporting situation to a situation that could only be supported by federal and state monies.

Rove's plan is a disservice to the President, and to America. Instead of  "leaving postal workers behind," the Bush Administration could actually strengthen America by preserving a segment of its middle class, and gain inroads into traditional Democratic bases while potentially expanding the Republican Party's base.


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