Management & Labor

The State of the Shrinking Postal Service Workforce

Despite its new deal with Amazon, it's unlikely the Postal Service will start to reverse years of workforce cuts. View data showing numbers of postal employees in each state.
by | November 13, 2013
 

While the Postal Service remains a major employer across many states, its current workforce of about 600,000 employees nationwide is one that is slated to continue to shrink in the coming years.

USPS announced Sunday it had reached an agreement with retail giant Amazon to launch Sunday delivery service in select areas, meaning they’ll need to be staffed seven days a week. Although the arrangement provides a boost to the struggling agency, it appears unlikely that it will ramp up hiring anytime soon as it continues to post substantial losses.

The agreement with Amazon calls for pilot programs for the New York and Los Angeles metro areas to begin immediately, with some reports suggesting the service will likely further spread to other regions next year.

USPS spokeswomen Patricia Licata said in an email that the agency plans to deliver packages on Sundays using city carrier associates and rural carrier associates – part-time employees working variable schedules – rather than full-time staff. The agency will hire additional associates if the need warrants it, but there are no plans to convert these employees to full-time status, according to Licata.

Over the long term, the Postal Service has seen its employee count dwindle year after year. The agency reports it employed approximately 617,000 workers at the end of June. Of those, 494,000 were considered full-time or “career” employees – the lowest tally since 1966. Since 2000, USPS has trimmed its workforce by about 294,000, a reduction of about a third. (see chart)

“As the workload continues to decrease, due to decrease in mail volume and increase in efficiency, the workforce will continue to decrease in size,” Licata wrote.

Much of the cuts so far resulted from attrition. As we’ve reported previously, Postal Service employees are among the oldest workers of any industry group, so it’s reasonable to assume many more will head for the exits as they reach retirement age.

To further reduce labor costs, USPS has offered employees various voluntary separation incentives. In 2012, the agency proposed two different incentive programs for postmasters and the National Postal Mail Handlers Union. This year, USPS put forward early retirement and special incentive packages for 187,000 members of the American Postal Workers Union.

The remaining Postal Service workforce is spread unevenly across states. USPS provided Governing with state-by-state employment counts for all full and part-time workers. The agency, for example, employs 64,000 workers in California and another 40,000 in Texas, making it among the largest employers in those states.

On a per household basis, USPS employs more workers in New Jersey than any other state – about 6.9 per 1,000 households. Other states with above-average tallies include South Dakota (6.5 per 1,000), Vermont, Rhode Island and Massachusetts (all with about 6.4 employees per 1,000 households). On the low end, there are only about 3.9 postal employees per 1,000 households in Arizona.

The following chart shows total USPS employment for both full and part-time employees as of October, with per household and per capita rates calculated using the most recent 2012 U.S. Census Bureau estimates:

Of course, the size of the workforce depends on much more than simply the number of potential customers residing in each state. More employees are needed in areas home to key parts of the agency’s processing and transportation networks. Delivering mail to rural and sparsely-populated areas also requires more hours.

Part-time employment is one segment of the workforce that has expanded, saving the agency substantial wage and benefits expenses compared to full-time staff. As of June, USPS employed 123,000 part-time workers, an increase of about 25,000 over nine months prior.

This trend may start to reverse to a degree, though.

A new USPS labor agreement with the National Association of Letter Carriers stipulates that part-time employees must be offered unfilled vacancies. The union reports between 1,500 and 2,000 employees were converted to full time status in the first two months of the agreement, and it expects much of its remaining 35,000 non-career workers to also be converted by 2017.

The agency is expected to focus its efforts on shedding payroll costs any way it can, as labor expenses make up about 80 percent of the agency's total expenses. Last month, USPS defaulted on a $5.6 billion payment for retiree health benefits due Sept. 30 – the third time it had done so.

The Postal Service has posted losses the past several fiscal years -- most recently a $15.9 billion net loss in 2012.

Much of the agency's declining revenues can be attributed to a steady drop in mail volume, particularly first-class mail. Since 2007, total USPS mail volume has plummeted 25 percent.

The growing e-commerce market, though, presents an opportunity for the cash-strapped agency.

Postmaster General Patrick R. Donahoe told reporters earlier this week that the agreement with Amazon is part of an effort to change its business model.

 

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