Postal arbitration makes case for EFCA

Former postal manager David C. Bakke got his facts wrong and misled your readers with his March 17 letter concerning your editorial on the Employee Free Choice Act (“The Union Cudgel,” March 11).

“Most” Postal Service contract negotiations since 1971 have not gone to binding arbitration. For letter carriers represented by NALC, there have been seven negotiated contracts (including the last two 5-year agreements), four arbitrated contracts and one partially arbitrated settlement. Moreover, the consequences for USPS customers have not been “costly” and Bakke is flatly wrong to claim it would be “difficult to find any other company” that is raising prices in this difficult environment. Postage rates—and postal wages—have largely tracked inflation since 1971 and U.S. stamp prices remain among the lowest in the world. UPS and FedEx hiked rates by between 5.9 to 6.9% in January—more than the 3.8% postage increase planned for May.

Bakke is right about one thing: There is “no linkage” between pay and productivity. According to the Bureau of Labor Statistics, postal labor productivity increased 44% between 1972 and 2006 (the most recent year with data), much more than inflation-adjusted postal wages (down 2%) and compensation (pay and benefits, up 29%).

Far from harmful, binding arbitration is a success in the Postal Service: workers have solid Middle Class pay and benefits, taxpayers have been freed of providing operational support and mailers enjoy high-quality, affordable services. If the Bush administration had not saddled the USPS with tens of billions of dollars of taxpayer obligations from the pre-1970 Post Office Department in 2006, the USPS would have been profitable last year despite the recession, and would be much stronger today.

Rather than undermining the case for the Employee Free Choice Act’s binding arbitration provision, which only applies to first contracts, the Postal Service experience demonstrates it can work fairly for workers, employers and consumers.

William H. Young
President, National Association of Letter Carriers, AFL-CIO

—President Young’s response sent to the Wall Street Journal regarding the letter (below)

Going Postal With the Economy

Regarding your editorial "The Union Cudgel" (March 11): I am a retired executive of the U.S. Postal Service (USPS) who experienced the consequences of a little noticed feature of the Employee Free Choice Act. This bill involves more than allowing labor to avoid the messiness of secret ballots. It also involves "binding arbitration," which would require that a federally appointed arbitrator rule on contracts in which management and labor can't reach agreement. The USPS has decades of experience with binding arbitration, thanks to the Postal Reorganization Act of 1970.

The consequences have been costly for USPS customers. For years, most USPS contract negotiations have deadlocked and therefore have gone to an arbitrator (actually a three member panel). The result has been costly contracts with no linkage to productivity improvement, cost reduction, or product pricing. Salaries and benefits, including cost of living allowances, continue to increase, while revenue and mail volume decrease. Contracts become even more costly over time because arbitrators are called on to interpret contract provisions. This process creates an expanding set of procedures and work rules.

Arbitrators enjoy the fruits of employment and consequently are always looking to provide benefits to both sides so they receive future assignments. These same arbitrators in no way represent the interests of the large mailers and other customers of the postal service who have suffered from a relentless series of price increases including a 3.8% increase in postage scheduled for May 11, 2009. It would be difficult to find any other large business with a combination of economic and structural problems continuing to increase prices in this environment.

If the Employee Free Choice Act becomes law the experience of the USPS will be magnified throughout the economy, creating a rigid labor market not unlike what is found in Europe. I applaud the work of the Chamber of Commerce in communicating the damage this bill will cause.

David Bakke

—reprinted from the March 17, 2009, Wall Street Journal