Good morning. My name is William H. Young. I am the President of the National Association of Letter Carriers. On behalf of 300,000 active and retired city letter carriers across the nation, thank you for this opportunity to share our views on the crucial issue of postal reform.
NALC is the exclusive collective bargaining representative of approximately 220,000 city letter carriers who work in every state and territory of the nation. City letter carriers have a tremendous stake in the future of the Postal Service. For them postal reform is not simply a policy matter or even a political issue, it is a matter of great personal importance for themselves and their families. So I wish to thank Chairman Collins, Senator Carper and all the members of the Committee for taking up this vitally important issue.
Over the past decade, my union has been urging Congress to pursue comprehensive postal reform. We have long recognized the need for a new business model for the U.S. Postal Service in the age of the Internet. Until recently, the debate on postal reform has been largely confined to the House of Representatives. Thanks to the new leadership of this committee and the work of the recent Presidential Commission both ends of Pennsylvania Ave. we finally have a real chance for progress on postal reform. NALC supports the general principles for reform recently outlined by President Bush and looks forward to working with leaders of both Houses of Congress to achieve bipartisan postal reform in 2004.
Today I would like to briefly address the big picture of postal reform before turning to the key workforce issues that are the main topic of this panel's testimony.
NALC believes the Postal Service's unmatched ability to reach every household and business in America six days a week is a vital part of the nation's infrastructure. Universal delivery of letters, direct mail, periodicals and parcels by the USPS is absolutely essential for the economic health of the United States. As such, it is important to take steps now to strengthen the Postal Service's ability to function in the face of technological change. We urge Congress to reject a pure down-sizing strategy and to embrace an empowerment strategy for the Postal Service. The USPS should be given the commercial freedom it needs to maximize the value of its universal service network by adding services and working with its customers to find new uses of the mail to replace those uses now that are now migrating to electronic alternatives. Greater commercial freedom which involves flexibility over prices and the ability to strike partnerships to optimize the value of its network -- would allow the USPS to maximize revenues and control costs while retaining the value of universal service. We recognize this approach poses the difficult challenge of balancing commercial concerns and public service considerations, but it is possible to give the USPS the flexibility it needs while protecting the legitimate concerns of competitors, customers and the public at large
Let me now turn to the main topic of this hearing, postal workforce issues. Our starting point is simple: Collective bargaining is a fundamental right of all and the Postal Reorganization Act rightly established collective bargaining in the Postal Service under the auspices of the National Labor Relations Act. I'd like to make a couple of general observations before suggesting some guiding principles for workforce reforms.
First, I'd point out that collective bargaining in the Postal Service has been a resounding success. Since the Postal Reorganization Act was enacted, there has not been a single work stoppage or significant disruption in service as a result of labor relations. Given that the PRA was enacted in part as a result of a national postal strike in 1970, this 34-year record of peaceful labor relations should not be minimized. The fact is postal collective bargaining has been a "win-win-win" proposition: Postal workers have achieved decent pay and benefits, taxpayers have saved billions through the elimination of direct and indirect taxpayer subsidies and mailers have enjoyed affordable postage rates.
Second, it is important to note that neither the postal unions nor postal management favor radical changes to the existing postal collective bargaining system. Given that all sides agree that mail delivery is an essential public service that should not be disrupted by lock-outs or strikes, a workable system for resolving collective bargaining impasses is essential. NALC believes the existing system of interest arbitration has worked extremely well.
Third, it is important to note that postal labor relations have improved dramatically in recent years. Three of the four unions now have labor contracts in place that were voluntarily negotiated. All four have made progress in reducing the number of workplace grievances using various mechanisms. These improvements occurred not because Congress or the GAO or any other outside party mandated them; they happened because the parties themselves worked very hard to find common ground and to seek ways to resolve mutual problems. Postmaster General Jack Potter and his team deserve credit for working with us to achieve this transformation.
With these general points in mind, NALC urges you to abide by four principles when you consider reform of the collective bargaining system:
||One, I urge you to follow the Hippocratic Oath: "First, do no harm." The system we have is not perfect indeed, no system is perfect. But the parties have learned how to work together within the current framework and, as I outlined above, the process has worked well for all concerned. At a time of great change for the Postal Service in other areas, labor stability is crucial.
||Two, maintain the flexibility that is built into the current law. The PRA contains specific but flexible timetables for negotiating contracts and resolving collective bargaining impasses. It also provides a menu of options for impasse resolution and gives the parties the flexibility to shape these options for use when appropriate as conditions change. Indeed, the unions at this table have used at various times, mediation, fact finding, mediation-arbitration, mediation-fact finding in combination and last best offer arbitration. In the face of constant change, the flexibility of the current law is a virtue.
||Three, avoid politicizing the collective bargaining process. Congressional or White House intervention in the process would be highly destructive. This would inevitably happen if a politically appointed regulatory body were injected into the negotiations process.
||Four, avoid exposing the process to outside litigation. Subjecting the results of collective bargaining to litigation before a postal regulatory board, as proposed by the President's Commission, would be disastrous to the process. Depending on the prevailing political winds of the day and the makeup of the regulatory board at any particular moment, either side might be tempted to try to obtain from regulators what they could not expect to achieve through good faith bargaining.
Finally, I wish to address a couple of specific issues that have arisen in the wake of the report of the President's Commission on the USPS the direct negotiation of pension and health benefits, and changes to the system of interest arbitration.
As you know, as employees of the federal government, postal employees are covered by one of the two federal pension plans and by the Federal Employees Health Benefit Program. Although eligibility for participation in these programs is automatic and is not subject to collective bargaining, it is important to understand that the cost of such benefits figure very prominently in postal labor negotiations. In the area of health benefits, postal management and its unions already directly negotiate the share of premiums to be paid by workers and the Postal Service. And when it comes to negotiating wage increases, the rising cost of pensions is explicitly discussed by the parties. The so-called roll-up factor for employee fringe benefits the added cost of benefits when postal wages are increased is never far from the negotiators' minds. And you can be sure that no interest arbitration panel employed over the past 20 years has been spared voluminous evidence from both sides on the cost of health and pension benefits.
My point is this: Although the parties do not directly negotiate over all aspects of postal benefit costs, these costs are not ignored and they invariably affect the results of wage negotiations. Indeed, a close examination of postal wage trends over the past 25 years reveals that postal wages have increased nearly 15 percent less than wages in the private sector as measured by the Employment Cost Index. This wage restraint is a direct reflection of the efforts of negotiators (and interest arbitrators) to restrain wage costs in the face of rising health and pension costs for the USPS, a trend that has affected all American employers.
Given this context, we do not believe that is necessary to formally place health and pension programs on the collective bargaining table. The parties already effectively take these costs into account under the existing system.
Let me turn to one other specific workforce topic raised by the President's Commission: Reforms to the postal interest arbitration process. The Commission suggested major changes to the existing dispute resolution process, including the elimination of tripartite arbitration, the imposition of a strict timetable for mediation and arbitration, the required use of "last best and final offer" procedures and regulatory review of collective bargaining agreements.
We believe these changes are unnecessary and counterproductive for a couple of very practical reasons. First, the Commission's proposals would discard 30 years of experience by the parties and require us to start all over again under a radically different process a prospect that would inevitably impose significant costs on both sides. Second, we believe the only workable changes to the system of collective bargaining must be developed and negotiated by the parties themselves, not externally legislated or mandated. Both parties must see the process as "their process" for the results to be legitimate. The existing system gives us the flexibility to shape the dispute resolution process without outside intervention.
Allow me to add one last note on interest arbitration. We believe the existing dispute resolution system is a fair and acceptable alternative to the right to strike. I say this not because we always prevail when we go to interest arbitration. Indeed, on more than one occasion we have lost. In the 1990s an interest arbitration panel chaired by Richard Mittenthal adopted a USPS proposal to create a lower-paid temporary work force to handle the transition to full automation and another panel chaired by Rolf Valtin increased the employees' share of health insurance premiums. I say it because, win or lose, my members know that the existing system gives us a fair chance on the merits and therefore they accept the results as legitimate. The Commission's proposed changes in the area of interest arbitration fail this basic test of fairness. They would surely do more harm than good.
I want to conclude my testimony by repeating something I told the members of the President's Commission at its first public hearing in February 2003. Good labor relations must be built of trust and good faith between the parties. No amount of tinkering with the mechanics of the collective bargaining process will change that basic fact. At this moment of great challenges for the Postal Service, we have worked hard with the Postmaster General to build trust between us and to improve the workplace culture in the Postal Service. Please tread lightly in these areas so as not to risk the progress we've made.
I offer this Committee the full cooperation of the men and women who deliver the nation's mail everyday. Working together we can ensure that every American household and business will continue to enjoy the best postal service in the world for decades to come.