Obama: Postal Privatization a ‘Bad Idea’

APWU Web News Article 009-2010, Feb. 5, 2010

President Obama said in an interview posted on YouTube on Feb. 1 that privatization of the USPS would be a “bad idea.” He made the comment during a round of quick answers to questions posed by citizens.

When asked if he would consider allowing the private sector to buy and run troubled federal agencies such as the Postal Service, Obama said privatization is a “bad idea most of the time.”

Regarding the Postal Service, he said, “Everybody would love to have that high-end part of the business,” such as business-to-business delivery. But private companies would not want responsibility for the other services that the Postal Service provides, such as delivering a postcard to a remote area.

The USPS provides universal service, the president said, and private companies would not.

Watch the White House interview with President Obama here.

A Stunning Announcement:
OIG Says USPS Overpaid
Federal Government $75 Billion

Burrus Update 03-2010, Jan. 20, 2010

The Office of the Inspector General (OIG) has issued a stunning announcement [PDF]:
The USPS has been overcharged $75 billion in contributions to the Civil Service Retirement System (CSRS) pension fund.

After an in-depth investigation, the OIG has concluded that an inequitable system for computing the Postal Service’s CSRS pension responsibility has caused the dramatic overpayment. The OIG study [PDF] was conducted in conjunction with the Hay Group, a well-known economic consulting firm.

The funding error follows two previous findings that the Postal Service had been required to overfund its pension obligations. In 2002 it was determined that the Postal Service was on track to overfund CSRS by $78 billion, and in 2003 the USPS was overcharged $27 billion for CSRS military service credits. The earlier overpayments were corrected by legislation adopted in 2003 and 2006, respectively.

The newest overfunding debacle, if corrected, would more than offset the Postal Service’s deficit from Fiscal Year 2009 and the expected shortfalls in FY 2010 and 2011. The doomsday predictors of the imminent demise of the Postal Service must now find a new rationale for their efforts to dismantle postal services.

The cry for a new business model and legislative relief ring hollow when USPS financial difficulties could be fully resolved by returning to the Postal Service the overpayments made to date. Realigning the network, reducing employee compensation and benefits, and transferring the cost of universal service to individual mailers can now be exposed for the fraudulent exercises they represent. Instead, we can engage in a meaningful dialogue about the future of hard-copy communication and the role of postal services in the 21st century — without the looming threat of bankruptcy.

This report is good news for a beleaguered government service. USPS service standards and productivity have remained at high levels; the economy is recovering, and the black cloud of fiscal insolvency could be removed. All parties in the postal community who wish to be of assistance must join in an effort to correct the inequity and relieve the Postal Service of the unjustified funding requirement.

In the meantime, we can take a deep breath and stop the momentum for another round of harmful postal “reform.” And after the attrition of 115,000 APWU-represented positions since 2002, we would appreciate a public recognition that our members have contributed their share.

William Burrus
President

Three States Threaten to Sue FedEx

Over 'Independent Contractor' Ruse

Three U.S. states have announced plans to sue package delivery giant FedEx Corp. for violating labor laws by illegally classifying drivers as independent contractors rather than employees.

          As unions have pointed out for years, the classification allows FedEx to avoid workers’ compensation costs and ignore anti-discrimination laws and wage and hour protections.  It also throws roadblocks in the way of drivers who want to unionize.

          The attorneys general of New York, New Jersey and Montana said the company has caused a “serious injustice” to more than 1,000 drivers in the three states.

          Even as the company is claiming the drivers are not employees, it subjects them to strict work rules, down to the color of their socks, and to thousands of dollars of expenses to buy or lease trucks and use company uniforms and scanners. The company controls the hours they work, how they dress and when they drive their own trucks.

          In addition, the states said FedEx’s actions deprive them of tax payments and result in unfair competition.  FedEx is second in the private sector package delivery business only to United Parcel Service, a unionized company.

          The Teamsters praised the threat of action against FedEx. “FedEx Ground can’t get away with being a bully anymore, hiding behind its army of lobbyists to avoid responsibilities to workers and to American taxpayers,” said union president Jim Hoffa. “This is an issue of fairness. The laws of this country apply to everyone.”

          The union said FedEx Ground is currently the subject of investigations by 30 other states over its misclassification scheme. Also, more than 45 class-action lawsuits have been filed against the company in state and federal courts over the issue.

Unemployment Continues to Rise,

As Do Claims of Recession’s End

The nation’s unemployment rate continued its steady creep upward as 2009 was winding down, but concern for the jobless appeared to be taking a back seat to Wall Street joy over rising stock prices and economists’ declarations that the Great Recession has ended.

          Despite all the upbeat rhetoric, however, the fact remained that if laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the unemployment rate rose to 17 percent in September – roughly 26 million people.  For every six workers looking for a job, only one was there to be found.

          The “official” unemployment rate in September was 9.8 percent.

          Some economists were calling it a “jobless recovery.”  The unemployed were calling it more of the same.

          AFL-CIO President Richard Trumka said things would be even worse if not for the Obama administration’s American Recovery and Reinvestment Act.  But, he said, Obama and Congress should extend jobless benefits and give more help to budget-constrained states and cities and put more money into job-creating infrastructure and green jobs.

          For the average person, insistence by economists that the recession had ended did not compute with the numbers being reported.  Manufacturing was down and consumers were still holding down their spending, either because they didn’t have anything to spend or because they were afraid of losing their jobs.

          Even temporary help agencies were cutting jobs.

          Meanwhile, the stock market was rising, the financial industry was back to its old tricks of giving multi-million-dollar bonuses to its bigshots, and big corporations were rewarding their top executives as if nothing had changed over the past year.

          There was general agreement that the official unemployment rate would top 10 percent by the end of the year, and some analysts said it could be well into next year before things started to improve for the workforce.

          The Senate was considering legislation in October to extend unemployment benefits for an additional 14 weeks, or 20 weeks in states with especially high unemployment, but progress on the plan was being blocked by Sens. Orrin Hatch (R-Utah) and Jon Kyl (R-Ariz.).