The increase in postage rates that took effect May 14 has been the subject of numerous news stories purporting to analyze the size of the increase and speculating about the future role of hard-copy communication.

In general, these reports seem to accept the fact that inflation drives all costs, but many go on to link the postage increase directly to the cost of labor. Virtually all of the articles have recited the claim that 80 percent of postal expenses can be attributed to labor costs. Based on this misleading statistic, comparisons have been made to private delivery companies, such as Federal Express and United Parcel Service.

The 80 percent figure is deceptive because it includes the salaries and benefits of the Postal Service's entire management structure, including supervisors, managers, and executives, as well as casual and other non-career employees who are not represented by the postal unions.

The Postal Service has chosen to report labor costs as a single line-item, grouping craft employees who have collective bargaining rights with supervisors, managers, and contract employees. It is this artificial grouping that results in the 80-percent figure.

News sources then report postage costs as though the 80-percent labor cost is directly related to negotiated union contracts. Accurate reporting would reveal that the APWU bargaining unit expenses comprise only 26.2 percent of USPS expenses; city letter carriers comprise just 22.2 percent; and total expenses for employees covered by collective bargaining agreements equal roughly 60.5 percent. This is a far cry from the reported 80 percent.

The published comparisons with FedEx and UPS are also flawed. Both FedEx and UPS own and operate their own fleets of aircraft, while the Postal Service contracts for air transportation. Because of the air fleets, a large segment of FedEx and UPS costs are assigned to the category of equipment, rather than labor.

Increases in postage rates and postal employees' wages have been consistent with increases in the Consumer Price Index (CPI) over the past 35 years. The American Postal Workers Union is proud that we have been successful in securing livable wages and benefits for the workers who operate the most reliable, efficient, and affordable postal service in the world.

Courtesy of PostCom