Aug. 12 (Bloomberg) -- The U.S. Postal Service, which expects to run out of money next month, may have a hard time carrying out a proposal to cut 220,000 jobs by 2015, a postal executive and labor professor said.
The Postal Service, which this week circulated a proposal to cut 39 percent of full-time employees, including through mass firings, would need congressional permission and President Barack Obama’s signature on a law to break a labor contract with its largest union. The process would be neither quick nor easy, Anthony Vegliante, chief human resources offices for the Postal Service, said today in a telephone interview.
“It would be tough,” Harley Shaiken, a professor at the University of California at Berkeley who has written two books on labor issues and testified before Congress on union organizing. “It would make the federal government the largest contract breaker in the country.”
The Postal Service, based in Washington, is seeking to reduce costs and return to solvency. Postmaster General Patrick Donahoe said last week that, unless Congress allows the agency to change required payments and operations, he may seek to raise the agency’s $15 billion debt limit. The Postal Service expects to reach that limit in September, he has said.
The job cuts would be “very damaging” politically to the Obama administration because of the country’s high unemployment rate, Shaiken said in a telephone interview. The U.S. jobless rate that has exceeded 8 percent since February 2009.
“This would cause a huge uproar because it would take place in a context where unions have been under attack by state governments,” Shaiken said.
The Postal Service has few options other than to propose the job cuts, Vegliante said. The Postal Service, which has posted losses for the past eight quarters, needs to reorganize its business and reduce costs, he said.
“This isn’t about just passing expenses on to the customer or passing our problems on to someone else,” he said. “We’re trying to fix it.”
Labor unions yesterday criticized the job-cut proposal and a separate one to pull employees out of federal retirement and health-benefit programs.
“The issues of lay-off protection and health benefits are specifically covered by our contract,” National Association of Letter Carriers President Fredric Rolando said in an e-mailed statement. “The Congress of the United States does not engage in contract negotiations with unions and we do not believe they are about to do so.”
The Postal Service is scheduled to begin negotiations with the letter carriers union and the smaller National Postal Mail Handlers Union next week. In November, it signed a 3 1/2-year agreement with the American Postal Workers Union, which represents the largest number of postal employees.
That agreement only allows mass firings of employees with less than six years of experience, Vegliante said. The Postal Service has about 560,000 full-time employees. About 20,000 have worked less than six years for the service, Vegliante said.
The Postal Service has about 460,000 retirees, he said. The average age of a full-time employee is 51, said Dave Partenheimer, a spokesman for the service.
Senator Thomas Carper, a Delaware Democrat who has proposed legislation that would allow the service to cut delivery to five days a week and more easily close post offices, said the proposal underscores the seriousness of the “financial predicament.”
“I am open to considering any idea that can prevent the Postal Service from going bankrupt,” he said in an e-mailed statement.
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