ABSTRACT
This chapter examines the problem of excessive wages in Postal Service labor relations. Ronald Reagan's confrontation with the Professional Air Traffic Controllers Organization set the scene for labor relations in the airline industry, the Postal Service, the federal government, and indeed for the entire country. In the posturing preceding negotiations, the Postal Service contended that pay for union workers was already between 10 percent and 25 percent higher than the pay for comparable private sector jobs. The postal unions complained that the Postal Service's economic package, which included a wage freeze, elimination of the most recent inflation adjustment, a leaner formula for future inflation adjustments, and cuts in sick pay would result in actual wage cuts. The report of the independent panel of federal arbitrators was a major blow to the Postal Service. Policymakers hoped that reorganization would liberate the Postal Service to pursue efficient managerial techniques without the oversight and hindrance of Congress and the executive branch.
