**Submission to the President's Commission on the United States Postal
Service**

**National Association of Letter Carriers, AFL-CIO**

**February 12, 2003**

**Introduction**

The National Association of Letter Carriers (AFL-CIO)("NALC") is the
exclusive collective bargaining representative of 231,000 city letter
carriers employed by the United States Postal Service (USPS). More than
90 percent of those eligible for membership have voluntarily joined
NALC, making it the best organized open-shop union in the country. In
addition to its 213,000 active members, NALC has 85,000 retired members.
Founded in 1889, the NALC has since its inception pursued two goals: to
represent the interests of letter carriers and to advocate for universal
and affordable postal services for the American people.

The Commission will play a vital role in strengthening the USPS, one of
America's greatest national assets. USPS and its predecessor, the Post
Office Department, have played an important role in the social and
economic development of the United States since the American Revolution.
The Post Office helped build a continental democracy by facilitating
free speech and making a free press possible. It aided the expansion of
the nation from sea to sea by binding the nation together culturally. It
helped spur the development of numerous industries and associated
technologies (railroads, airlines) and it facilitated the emergence of
national commercial markets in virtually every sector of the economy.

USPS's contributions are on going, as the postal service remains a key
part of the nation's economic and social infrastructure. Today USPS
continues to serve its traditional role of binding the nation together.
It provides affordable access to 140 million households and businesses
six days a week, an unmatched daily service network that is 10 times
greater than the largest private delivery network. As the central hub of
a \$900 billion mailing industry (9% of the GDP), USPS continues to play
a vital role in the American economy. Today and for the foreseeable
future, it will constitute a crucial part of the national system of
financial payments. USPS is the primary distribution channel for the
nation's magazine publishing industry. It is also a vital part of both
the advertising and retail distribution sectors. And it provides solid
middle-class jobs to nearly 750,000 American families, jobs that allow
postal employees to provide a valuable service while earning enough to
pay their bills, invest in their children's education and save for a
decent retirement.

This Commission should preserve what is best about this 228-year-old
national treasure while giving it the tools it needs to fulfill its
historical mission in the changing circumstances of the 21^st^ Century.

**The Success of the Postal Reorganization Act**

The Postal Reorganization Act of 1970 has been a notable success. The
financial independence provided by the PRA, combined with its removal of
partisan politics from postal operations and postal rate-setting, paved
the way for three decades of progress. USPS today delivers more than
twice as much mail to 80 percent more households with fewer than five
percent more workers. The benefits of these efficiency gains have been
broadly shared by the public and the postal community:

1.  Mailers and postal consumers benefited from affordable postage
    rates. America's postage rates, which are among the lowest in the
    world, have increased less than the overall rate of inflation under
    the PRA. Over this same period, the prices of services in general
    increased nearly 30 percent more than the overall rate of inflation.

2.  Taxpayers saved tens of billions of dollars. Direct taxpayer
    appropriations for postal services, which covered 23% of operating
    costs in the final year of the Post Office Department, were phased
    out in the 1970s; indirect subsidies for postal fringe benefits were
    gradually eliminated and their costs gradually transferred to the
    USPS in the 1980s and 1990s, saving the Treasury \$80-\$90 billion.
    The real cost of mailing letters\-- taking into account both postage
    rates and taxpayer costs\--has therefore declined significantly (by
    approximately 35%).

3.  Collective bargaining, based on a modified private industry model,
    was successfully introduced to the Postal Service. The real wages of
    postal employees (adjusted for inflation) have remained essentially
    level since the passage of the PRA. Objective, verifiable gains in
    labor productivity (36 percent according to the Bureau of Labor
    Statistics) have more than paid for the wage increases received by
    postal employees. And there has been no disruption of service in
    more than 30 years.

**The Need for Change**

The success of the PRA, however, does not obviate the need for change.
Indeed, NALC has long recognized that fundamental reform of the PRA is
necessary. The emergence of digital alternatives to mail and the
changing needs of the American economy have rendered the PRA outdated.
The commercial and technological factors altering the postal industry
are by now familiar. In summary, the demand for the Postal Service's
core business -- First-Class letter mail -- is declining at the same
time that the cost of providing universal service (with 1.8 million
additional delivery points added each year) continues to rise. NALC has
recognized this dilemma and has worked diligently to educate its members
about it through its monthly magazine, special publications and
educational training program. Indeed, it has regularly called on
Congress to enact comprehensive postal reform since 1994. Over the past
several years, NALC has worked closely with leaders of both political
parties and the Postal Service's major customers to advance reform.

Although we have recognized the need for deep structural reform and have
attempted to accommodate the interests of all parties, we believe there
are two essential elements of the PRA that must be preserved. First,
postal reform must protect universal service, which embodies six-day
delivery to every household and business in America and represents the
core economic value of the USPS network. Second, it must preserve the
system of postal collective bargaining, a system that has ensured three
decades of uninterrupted service, an increasingly productive workforce
and a non-inflationary wage-setting process.

**The Work of the Commission**

After ten years of effort, NALC has gained a deep appreciation of the
difficulty of forging and maintaining a consensus on postal reform.
Despite the wide range of interests and policy goals involved, we
believe that such a consensus is possible, based upon a good-faith
exploration of practical, not ideological solutions.

The efficiency of the nation's Postal Service is an important goal. But
it should not be the only goal. Equity, affordability, and national
cohesion are also important goals. Proposals that benefit businesses and
households in high-volume suburban areas at the expense of those located
in low-volume rural and inner-city areas are counter-productive. So are
proposals that sacrifice the rights of one set of postal stakeholders to
benefit another set of stakeholders.

There is no perfect model for postal reform. The postal industry is
unique, and within the postal industry, the U.S. Postal Service stands
alone in its sheer size and scope. One must approach the experience of
reform efforts in other network industries and other countries with
caution. A labor-intensive postal network is fundamentally different
from a capital-intensive telecom network and postal services in small
countries are quite different from those that span a large continent.

The Commission will focus attention on the need for reform. It is
critically important that policy makers and the public at large
understand how the Postal Service really works and why it is important
to reform its legislative charter. Successful reform will reconcile the
various interests and goals of the American people and the customers the
USPS serves.

**Contact Information:**

**William H. Young**

**President**

**National Association of Letter Carriers, AFL-CIO**

**100 Indiana Avenue, NW**

**Washington, DC 20001-**