State of USPS and the Employee Free Choice Act William Burrus President Terry Stapleton Secretary-Treasurer

The State of the USPS and the Employee Free Choice Act Why both these issues are connected. Why both these issues are connected. Getting the message to our member. Getting the message to our member. Its a fight we can win! Its a fight we can win!

HR 22 USPS Funding for Retiree Health Benefits William Burrus President Myke Reid Legislative/Political Director

USPS - Government Relations, December 2008 The Postal Service is under serious financial strain due to challenging economic conditions that continue to reduce mail volume. A combination of factors has lead to the severity of the economic climate: Year over year fuel price increases Increases in the cost of paper Uncertainty in the financial markets Increased diversion of hardcopy messages to the Internet Continued increase in USPS expenses in pay and benefits

The Postal Service, Congress, and the rest of the postal community recognize that it is in a precarious financial condition. The public debate is whether to file an exigent rate case, reopen the political compact that led to the PAEA and release it from its obligation to fund future health benefit premiums, cut back on the frequency of delivery, or drastically reshape the Postal Services workforce.

USA Today, Gallup - Feb 1, 2009 What would you most like to see done to help the Postal Service out of its financial difficulties? Cut services such as Saturday delivery, or closing post offices Provide government funding Raise rates

USPS Revenue Fiscal Year Net income RevenueExpensesDebt 20051,44569,99368, ,81771,9172, (5,142)74,97380,1154, (2,806)74,96877,7747,200

Form 8-K, Filed with PRC, 2/19/2008

GAO - GAO T What GAO Found In fiscal year 2008, mail volume fell by 9.5 billion pieces, fuel prices increased by over $500 million, and cost-of- living allowances for postal employees increased costs by over $560 million. Cutting costs by $2 billion – primarily by cutting over 50 million work hours – did not close the gap between revenues and expenses. Thus, USPS recorded a loss of $2.8 billion for fiscal year Its debt increased by $3 billion by the end of the year to $7.2 billion. USPSs outlook for fiscal year 2009 has become more pessimistic. USPS projects a volume decline of 10 billion to 15 billion pieces, another loss, and $3 billion more in debt. At this pace, USPS could reach its $15 billion statutory debt limit by fiscal year 2011.

What GAO Found, pt 2 Two areas for further action to reduce costs include compensation and benefits, which is close to 80 percent of its costs, and mail processing and retail networks. Accelerated volume declines and changes in the publics use of mail indicate that USPS needs to move beyond incremental efforts and take aggressive action to streamline its workforce and network costs to assure its long-term viability.

GAO Proposed Options Work with unions to modify work rules: One option that would not require congressional action is similar to actions taken by other financially stressed entities, whereby USPS and its unions could agree on ways to achieve additional short-term savings, such as by modifying work rules to facilitate reducing work hours.

Options, pt. 2 Another option would be for USPS to close unnecessary retail facilities, and by reducing the number of facilities, USPS could lower the costs of maintaining its network of facilities. USPSs network of retail facilities has been largely static despite population shifts and changes in mailing behavior. In considering options to provide retail services at a lower cost, it is important to note that large retail facilities – generally located in large urban areas – generate much larger costs for the retail network than the smallest rural facilities and may therefore potentially generate more cost savings.

Options cont. Closing postal facilities is often controversial but is necessary to streamline costs. Congress encouraged USPS to expeditiously move forward in its streamlining efforts in PAEA. We recommend that USPS enhance transparency and strengthen accountability of its realignment efforts to assure stakeholders that realignment would be implemented fairly and achieve the desired results.

Postal Civil Service Retirement System Funding Reform Act of 2003 In 2002, OPM found USPS overfunding by $78 billion. In 2002, OPM found USPS overfunding by $78 billion. Required no rate increase for 2 years. Required no rate increase for 2 years. Required USPS to pay down debt. Required USPS to pay down debt. Pre-funding current employees retiree health benefits. Pre-funding current employees retiree health benefits.

PAEA Retiree Health Costs 8089.a. Postal Service Retiree Health Benefit Fund (3) (a) The United States Postal Service shall pay into such fund – $5,400,000,000, by September 30, 2009; $5,500,000,000, by September 30, 2010; $5,500,000,000, by September 30, 2011; $5,600,000,000, by September 30, 2012; $5,600,000,000 by September 30, 2008; $5,600,000,000, by September 30, 2013; $5,700,000,000, by September 30, 2014; $5,400,000,000, by September 30, 2007; $5,700,000,000, by September 30, 2015; $5,800,000,000, by September 30, 2016.

Pre-FundingPremium Payments Total 2009$5.4$2.3$ $5.5$2.6$ $5.5$2.9$ $5.6$3.3$ $5.6$3.6$ $5.7$4.0$ $5.7$4.4$ $5.8$4.8$10.5 Total$44.8$28.1$72.9 PAEA Retiree Health Funds

HR 22 Introduced by – Introduced by – Rep. John McHugh (R-NY) Rep. John McHugh (R-NY) Rep. Danny Davis (D-IL) Rep. Danny Davis (D-IL) Provides that funding come from RHBF through 2016 Provides that funding come from RHBF through Cosponsors 26 Cosponsors To amend chapter 89 of title 5, United States Code, to allow the United States Postal Service to pay its share of contributions for annuitants' health benefits out of the Postal Service Retiree Health Benefits Fund.

Cosponsors Abercrombie (D-AK)Latham (R-IA) Bartlett (R-MD)Lofgren (D-CA) Bishop (D-NY)Massa (D-NY) Boozman (R-AR)Pastor (D-AZ) Boren (D-OK)Rehberg (R-MT) Davis (D-IL)Ros-Lehtinen (R-FL) Edwards (D-TX)Sestak (D-PA) Ellison (D-MN)Space (D-OH) Gordon (D-TN)Terry (R-NE) Holden (D-PA)Thompson (D-MS) Kagen (D-WI)Visclosky (D-IN) Kildee (D-MI)Walz (D-MN) Kucinich (D-OH)Woolsey (D-CA)

What You Need to Do! Lobby your congressperson, and ask them to co-sponsor HR 22 Lobby your congressperson, and ask them to co-sponsor HR 22 Educate your local members about Educate your local members about HR 22 Educate your allies about HR 22 Educate your allies about HR 22

Delivery Points up 1.1M from 2007 to 1.49M delivery points a day Delivery Points up 1.1M from 2007 to 1.49M delivery points a day 716,000 Employees of which 642,000 are Bargaining Unit Employees 716,000 Employees of which 642,000 are Bargaining Unit Employees 2008 Volume 202.7B pieces 2008 Volume 202.7B pieces State of the USPS

9.5 billion or 4.5% fewer letter and flats in 2008 v billion or 4.5% fewer letter and flats in 2008 v Largest decline in history of USPS Largest decline in history of USPS A loss of $2.8 billion A loss of $2.8 billion

Postage rates will have to be increased causing further decline in volume Postage rates will have to be increased causing further decline in volume Mortgage and credit card mailings are down 57% Mortgage and credit card mailings are down 57% State of the USPS

Environmentalists argue against use of mails Environmentalists argue against use of mails Oil prices have been an enormous cost factor - fueling a 220,000 vehicle fleet Oil prices have been an enormous cost factor - fueling a 220,000 vehicle fleet For every penny increase of gas it costs the USPS 8M annually For every penny increase of gas it costs the USPS 8M annually State of the USPS

The USPS must pay 5 billion a year to prepay retiree health benefits The USPS must pay 5 billion a year to prepay retiree health benefits Stamp prices not taxes fund services, USPS supposed to operate in black Stamp prices not taxes fund services, USPS supposed to operate in black Borrowing limit of 15B and this year we will be up to it Borrowing limit of 15B and this year we will be up to it State of the USPS

2008 USPS cut 50 million work hours 2008 USPS cut 50 million work hours 23,000 vending machines 23,000 vending machines 2009 anticipated loss of another 8 billion pieces 2009 anticipated loss of another 8 billion pieces State of the USPS

156,000 offered Voluntary Early Retirement (VER) 156,000 offered Voluntary Early Retirement (VER) 3,685 retired on 12/31/08 3,685 retired on 12/31/08 4,000 more are expected to go in February ,000 more are expected to go in February 2009 State of the USPS

VERs will continue to be offered VERs will continue to be offered In the last 7 years - 100,000 employees have left the Service In the last 7 years - 100,000 employees have left the Service State of the USPS

What can we expect More excessing More excessing Casuals reduced and/or eliminated Casuals reduced and/or eliminated

PTF work hours reduced PTF work hours reduced Letter carrier impacts with carrier route adjustments and deployment of FSS Letter carrier impacts with carrier route adjustments and deployment of FSS Consolidation studies for mails and installations Consolidation studies for mails and installations What can we expect

The passage of the EFCA is essential to the APWU membership The Employee Free Choice Act is the most significant labor legislation in decades. This bill would allow workers who want to form unions a fair opportunity to do so. The Employee Free Choice Act is the most significant labor legislation in decades. This bill would allow workers who want to form unions a fair opportunity to do so.

The passage of the EFCA is essential to the APWU membership But, it is important not only to non-union workers, it is important to workers who already have unions. Corporations increase their profit margins by cutting workers pay and benefits. A large pool of non-union workers allows these corporations to put downward pressure on workers attempts to negotiate for decent pay. But, it is important not only to non-union workers, it is important to workers who already have unions. Corporations increase their profit margins by cutting workers pay and benefits. A large pool of non-union workers allows these corporations to put downward pressure on workers attempts to negotiate for decent pay.

The passage of the EFCA is essential to the APWU membership A survey of non-union workers revealed that 60 million of these workers want to have a union in their workplace. Among the many unorganized are truck drivers, custodians, mail processors, parcel sorters, and retail clerks who work for contractors that perform the same work as APWU bargaining unit employees. A survey of non-union workers revealed that 60 million of these workers want to have a union in their workplace. Among the many unorganized are truck drivers, custodians, mail processors, parcel sorters, and retail clerks who work for contractors that perform the same work as APWU bargaining unit employees.

The Employee Free Choice Act The Employee Free Choice Act balances the playing field and would let workers decide if they want a use majority card check or a secret ballot to form a union. That decision would no longer be made by management-for the workers. The Employee Free Choice Act balances the playing field and would let workers decide if they want a use majority card check or a secret ballot to form a union. That decision would no longer be made by management-for the workers.

90 days to reach agreement 90 days to reach agreement 30-day period where a mediator attempts to resolve the contract 30-day period where a mediator attempts to resolve the contract Arbitration Arbitration 2 year contract 2 year contract The Employee Free Choice Act

Comparability Standard for wage/benefits Comparability Standard for wage/benefits Concessionary Bargaining in 2010 ???(losing COLA, increased health premiums) Concessionary Bargaining in 2010 ???(losing COLA, increased health premiums) The Employee Free Choice Act affect on APWU

Employers are gearing up the rhetoric Employers are gearing up the rhetoric $200M campaign $200M campaign They claim EFCA allows unions to circumvent NLRB elections (half-plus-one and youre done.) They claim EFCA allows unions to circumvent NLRB elections (half-plus-one and youre done.) The Employee Free Choice Act (the attack)

Unions will target every business with 2 or more employees is now a target Unions will target every business with 2 or more employees is now a target After the Card Check bill becomes a reality, there is no check on Unions abusive tactics. After the Card Check bill becomes a reality, there is no check on Unions abusive tactics. There would be no NLRB-supervised secret ballot election free from the threats and intimidation of home visits. There would be no NLRB-supervised secret ballot election free from the threats and intimidation of home visits. The Employee Free Choice Act (the attack)

The opponents will claim that in work places where non-union workers wages and benefits are superior to some unions, that it is solely because they have no union. The opponents will claim that in work places where non-union workers wages and benefits are superior to some unions, that it is solely because they have no union. The Employee Free Choice Act (the attack)

To contact congressional representatives. To contact congressional representatives. Donate funds to the media campaign. Donate funds to the media campaign. Recruit local activist for EFCA training. Recruit local activist for EFCA training. Get workers stories from family members. Get workers stories from family members. Invite AFL representatives to membership meetings, seminars, and conventions. Invite AFL representatives to membership meetings, seminars, and conventions. Phone, , etc. Phone, , etc. Educate our members about EFCA Educate our members about EFCA The Employee Free Choice Act We need all Locals

Winning Messages For The Employee Free Choice Act HART RESEARCH P e t e r D ASSOTESCIA Key Findings from Survey among 1,007 Adults Nationwide and 404 Union Members Conducted December 2008 for

41 Strong Support For Employee Free Choice Act 73% Support for Employee Free Choice after hearing provisions Allows employees to have a union once a majority of employees in a workplace sign authorization cards indicating they want to form a union Strengthens penalties for companies that illegally intimidate or fire employees who try to form a union 75% Establishes binding arbitration in cases where a company and a newly certified union cannot agree on a contract after three months of negotiating 64% 61% Strongly favor Somewhat favor Oppose

42 Patterns Of Support For Legislation (After support and opposition messages) All adults Registered voters Union members Democrats Independents Republicans Conservative GOPs Non-conservative GOPs Men Women Whites African Americans Hispanics Strongly favor 41% 42% 58% 55% 34% 27% 18% 46% 38% 45% 36% 65% 46% Total favor 72% 72% 84% 87% 69% 48% 36% 74% 66% 78% 69% 88% 76% High school/less Some college College graduates Men graduates Women graduates Northeast South Midwest West RTW states Strongly favor 48% 42% 34% 31% 37% 46% 37% 42% 42% 36% Total favor 77% 76% 63% 51% 76% 81% 67% 73% 68% 69%

43 Stronger Support For Letting Workers Bargain For Wages, Benefits, Conditions 78% 17% 36% 58% Strongly favor Somewhat favor Strongly oppose Somewhat oppose Legislation that makes it easier for workers to bargain with their employers for better wages, benefits, and working conditions Legislation that makes it easier for workers to form unions in their workplace

44 Economic Message Trumps Opponents Attack With which side do you agree more on Employee Free Choice? +19 SUPPORTERS say that the system is broken and working people are struggling to make ends meet today, and the middle class is being squeezed. One way to help average people get their fair share is to let them bargain with their employers for better wages and benefits. Workers in unions earn 28% higher wages on average, are 62% more likely to have employer health coverage, and four times as likely to have a pension. Its time our economy worked for everyone again. (39% strongly agree) OPPONENTS say that this legislation is a bad idea because it would abolish the secret ballot elections now held to determine union representation. This legislation would force more workers into unions, because union bosses can use coercion or deception to collect authorization cards. And with our economy already weak, we dont need laws that give more power to the unions that wrecked the American auto industry. 54% 35%

45 Focus on Corporations and CEOs Strengthens Economic Message +29 SUPPORTERS say that the system is broken and corporations and CEOs arent treating workers fairly today. They cut back on workers health care and wages, while CEO salaries skyrocket. They intimidate workers who join together to negotiate a contract, but these CEOs wouldnt work one day without a written contract protecting their own perks and benefits. We need to protect workers rights, so that our economy works for everyone again––not just the CEOs. (40% strongly agree) OPPONENTS say that this legislation is a bad idea because it would abolish the secret ballot elections now held to determine union representation. This legislation would force more workers into unions, because union bosses can use coercion or deception to collect authorization cards. And with our economy already weak, we dont need laws that give more power to the unions that wrecked the American auto industry. 58% 29% With which side do you agree more on Employee Free Choice?

46 Health Care, Job Security, Pensions Trump Wages Workers in unions have more job security Workers in unions are 62% more likely to have employer health coverage Workers in unions are four times more likely to have a pension Workers in unions earn 28% higher wages Most important reason to make it easier for workers to form unions

47 Knowledge Of Process Remains Limited Only 47% of the public knows that employers oppose unions. Only 47% of the public knows that employers oppose unions. 60% of union members know that employers oppose (up 6 points since 2006). 60% of union members know that employers oppose (up 6 points since 2006). 80% of the public and union members have heard little or nothing about the Employee Free Choice Act. 80% of the public and union members have heard little or nothing about the Employee Free Choice Act.

48 Opponents of the legislation say it is a bad idea because it gets rid of the democratic right to a secret ballot election at work, and would allow union bosses to pressure workers into signing union authorization cards. Supporters of the legislation say it should be the choice of the employees, not their boss, how they decide whether to form a union, and they should be able to exercise their free choice without interference from management. Supporters of this legislation say we must improve the current company-dominated system, because corporations routinely fire and intimidate workers who try to form a union, which denies workers' freedom of choice and lowers living standards. Two Strong Responses to Secret Ballot Attack % margin over secret ballot message

49 But Dont Get Stuck Arguing Process There are currently two ways to form a union: ballot elections and majority sign-up, which has worked well at many responsible companies. Now it's the company that decides which of the two ways the workers can use. The Employee Free Choice Act would change that, so it is the workers, not the company, who decide which method to use. Opponents of this legislation are trying to confuse the issue by saying it eliminates elections. It does not. This legislation is a bad idea because it would abolish the secret ballot elections now held to determine union representation. A secret ballot election is a better way to determine employees' true desires than authorization cards collected by union organizers, which can involve coercion or deception. Members of Congress got their jobs through secret ballot elections, and they should allow workers to keep that system too. 46% 48% With which statement do you agree more?

50 This is about making it easier for workers to bargain with employers, not building unions. This is about making it easier for workers to bargain with employers, not building unions. Bring everything back to companies/CEOs and workers, need for a level playing field. Bring everything back to companies/CEOs and workers, need for a level playing field. Workers make the strongest messengers (Obama as well). Workers make the strongest messengers (Obama as well). Bottom Line Messages

51 We have strong, effective response to secret ballot attack: We have strong, effective response to secret ballot attack: The legislation does not eliminate secret ballot elections. It allows employees, not their employer, to decide which process they will use to form a union. The legislation does not eliminate secret ballot elections. It allows employees, not their employer, to decide which process they will use to form a union. But, debating the process is not the best way to pull people to our side. Our strength is the positive benefits of unionization. But, debating the process is not the best way to pull people to our side. Our strength is the positive benefits of unionization. Bottom Line Messages

52 Bottom Line Messages The strongest affirmative economic message contrasts struggles of workers with corporate/ CEO excess. The strongest affirmative economic message contrasts struggles of workers with corporate/ CEO excess. Emphasize improvement in benefits, especially health care. Raising wages is less compelling (fair wages is better). Emphasize improvement in benefits, especially health care. Raising wages is less compelling (fair wages is better). Its time our economy worked for everyone again. Its time our economy worked for everyone again.

53 ARAW Post-Election Survey The American Rights at Work survey was conducted November 2 – 4, 2008, among Senate voters in seven battleground states targeted by opponents of the Employee Free Choice Act (Colorado, Louisiana, Maine, Minnesota, North Carolina, New Hampshire, and Oregon). The American Rights at Work survey was conducted November 2 – 4, 2008, among Senate voters in seven battleground states targeted by opponents of the Employee Free Choice Act (Colorado, Louisiana, Maine, Minnesota, North Carolina, New Hampshire, and Oregon). American Rights at Work is a nonprofit advocacy organization whose mission is to support workers' rights to a free choice and a fair chance to join a union. American Rights at Work is a nonprofit advocacy organization whose mission is to support workers' rights to a free choice and a fair chance to join a union.

54 Almost No Voter Recall of Secret Ballot Issue in Targeted States Disagree with candidate on the issues Poor job, poor record, or lacks experience Too liberal/prefer a more conservative candidate Voting for a pro-life candidate Not honest, not trustworthy, a crook Union voting or secret ballot issue Volunteered concerns about Democratic candidates (among GOP voters who say they voted against the Democrat) Among 797 GOP voters interviewed, only four cite union voting or secret ballot as a reason.

55 Concerns About Democratic Senate Candidates Favors higher taxes and more government spending Is too liberal on issues such as abortion and gay marriage Would give one party too much power if Obama wins Is weak on national security and the war on terrorism Favors too much government involvement in health care Favors eliminating secret ballots in union elections (among GOP and third-party voters)

Affiliate with Your State and Central Labor Body Local affiliation with state and central AFL bodies is vital to win this fight. That is why the national union has urged locals to become member of their state AFL-CIO and central labor bodies. Local affiliation with state and central AFL bodies is vital to win this fight. That is why the national union has urged locals to become member of their state AFL-CIO and central labor bodies.

Thanks to Myke Reid, Mike Gallagher, Gary Kloepfer for his contribution to this webinar.

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