Executive Vice President
(This article will appear in the May/June 2013 edition of The American Postal Worker.)
The National Academy of Public Administration, an organization chartered by Congress to provide advice to government leaders, recently evaluated a proposal to privatize all postal operations except delivery and concluded the idea “merits serious consideration. The original privatization proposal, which I wrote about in the March-April issue of The American Postal Worker, was written by a group of self-described “postal industry thought leaders.”
Although the review by the National Academy of Public Administration (NAPA) doesn’t quite endorse the proposal to privatize everything but delivery, it gives a sense of legitimacy to the concept, which up to now has been dismissed as extreme.
While the NAPA report is supposed to provide an independent review of the privatization proposal, it was financed in part by a contribution from Pitney-Bowes, one of the largest pre-sort companies in the country. Pitney-Bowes owns more than 40 mail processing centers and stands to be a major beneficiary if mail processing operations are contracted out to the private sector.
It’s worth noting that NAPA conducted a similar study in 1982 and came to a very different conclusion: Breaking up the Postal Service “is not in the national interest,” NAPA wrote at the time.
The recent NAPA review acknowledges that there are a number of important factors that the proposal failed to address, such as the retiree health benefit pre-funding obligation, and stresses that “a number of issues need to be further explored before any implementation of the concept can, or should, be attempted.”
On the other hand, the NAPA paper points out that the Postal Service is already privatizing many operations through the use of “work-sharing” discounts.
The study notes that the value of mail processing and transportation completed by private companies is estimated at $17 billion annually. While some portray this astounding figure as operating costs avoided by the Postal Service, in many cases the discounts are so big that the Postal Service loses money on the deal. In 2008 the Postal Regulatory Commission concluded that many discounts exceeded the costs avoided. And while the Postal Service has lost revenue, private mail sorters have made healthy profits.
The NAPA review notes that if privatization of all operations other than delivery was fully implemented, several “bargaining units would be negatively impacted.” NAPA acknowledges that several people interviewed for the review concluded that “cost savings will be realized mainly from replacing union labor with non-union labor.”
Driving a Wedge Between Unions
The proposal to privatize everything but delivery also puts a wedge between the postal unions — it invokes a divide-and-conquer strategy that seeks to reduce opposition to the plan by seeming to protect the work of one group of employees, Letter Carriers, while targeting employees engaged in mail processing, transportation and other activities.
We’ve seen similar divide-and-conquer strategies used in Wisconsin, Ohio, Indiana and elsewhere in an attempt to cause division between public- and private-sector unions. The Postal Service frequently uses this strategy to divide postal unions.
In an ironic twist, however, the NAPA study recommends “evaluating the merits of the contention that the delivery function should remain a role for the Postal Service.” In other words, why not contract out the whole kit-and-caboodle, including delivery?
The union principle that An Injury to One is an Injury to All is as true today as it ever was.