Prepared for the 14th Conference on Postal and Delivery Economics
31 May – 3 June 2006, Bern, Switzerland
By Geoff Bickerton
Acknowledgements
The author would like to thank Katherine Steinhoff, Deborah Bourque and Dani Nadeau for their insightful
analysis, helpful comments, editorial assistance and solidarity.
Introduction
‘Political and academic discussion on the impact of liberalization or privatization of public services has
primarily focused on quality and accessibility for different groups of citizens. Little attention has been
paid, so far, to the impact on employment’.*
Public debate on the deregulation of postal services is usually focused on the potential impact of
introducing competition as it pertains to issues such as efficiency, price, and quality of service for the
businesses and individuals. Rarely is there any consideration given to the welfare of the millions of workers
who daily work to process and deliver the mail to addresses spanning the globe. As liberalization proceeds,
in Europe and other countries, postal unions are developing their policies and entering into the public
debate. For post office workers, and the unions that represent them, the stakes are high and the future is
uncertain.
Postal deregulation poses very profound challenges for postal sector unions. Many postal unions were
established in the late 19th or early 20th centuries. Unlike their private sector counterparts postal unions
were largely insulated from the impact of economic fluctuations. They did not have to be organizing unions.
The growth of the post office departments, the expansion of postal services and increased mail volumes
guaranteed an ever-increasing membership base.
Growth in membership numbers did not reflect success with respect to wages and working conditions.
Although they represented primarily blue collar workers, postal unions were often restrained by restrictive
public sector labour legislation and government personnel policies designed to meet the needs of government
employees rather than industrial workers. Likewise postal administrations were often under-funded and postage
rates were artificially suppressed to meet political needs.
The relative stability that had characterized industrial relations in the postal sector ended in the 1960s
and 1970s. Rising mail volumes, declining real wages, and the introduction of new work methods and new
technology all combined to create eruptions of industrial unrest in numerous countries including the United
States, the United Kingdom, Ireland and Canada. The drama of strikes and industrial conflict transformed the
unions both organizationally and ideologically. It did not however provoke the postal unions to organize
beyond the parameters of their employers. For most postal unions the postal service remained an industry unto
itself. The statutory monopoly for letters, combined with the universal service obligation, provided
protection and growth, even in times of rising productivity. Instead of organizing workers in the expanding
parcel delivery companies and the newly developing communications industries, the postal unions, for the most
part, remained content to be ‘servicing unions’ addressing the direct needs of their existing members, post
office employees. In the absence of direct competition for their largest product, lettermail, most postal
unions did not devote significant resources to organizing new members. It would be left to other unions,
based in the transportation sector, to organize courier workers. The high technology workers employed in the
new electronic communications sector would largely remain unorganized.
Postal unions continued to exercise considerable bargaining power at the bargaining table. The ability to
shut down an economically important national service, or even the threat to do so, enabled them to negotiate
the decent wages and benefits that had eluded them in the past. When disputes were not resolved through
negotiations, arbitration awards tended to provide compensation packages that were at least comparable with
the private sector.
In the current era, the deregulation of postal services has the potential to turn this established order
upside down. Competition in the lettermail market constitutes a direct threat to the bargaining power of
postal unions. Faced with the prospect of significant reductions in union density in their sector, postal
unions are required to undergo enormous institutional and cultural changes to transform themselves into
‘organizing unions’ capable of dealing with private sector employers existing under competitive market
conditions. The unions must develop new strategies and organizational structures if they are to maintain
union density and preserve their bargaining power in order to effectively represent the interests of their
membership.
Postal deregulation, coupled with the privatization of several large postal administrations, has also
served to open a debate about the relevancy of the universal service obligation in an era of electronic
communications and increased competition.
Deregulation presents challenges to the unions at both the levels of policy and organization. In Europe,
where the EU has encouraged the movement toward deregulation, the unions have been required to cooperate
together to an unprecedented degree. In North America, where the move toward deregulation is not as advanced,
the unions have an opportunity to prepare their interventions in the public policy debate which will
inevitably occur.
Most postal unions oppose deregulation of postal services because they believe it will have a negative
impact on employees, the public, and the post office. For many unions deregulation raises the spectre of
massive job loss coupled with reduced bargaining power and a resulting decline of income, benefits and
working conditions for the employees that they represent. Unions also believe that competition will
necessarily lead to reductions in postal services and undermine the ability of postal administrations to
fulfil the universal service obligation.
Are these concerns well founded? Do the negative consequences of deregulation outweigh the commercial
advantages for investors and large volume mail users?
This paper addresses the policy and organizational responses that have been developed by the Canadian
Union of Postal Workers (CUPW) to address the potential threat of the deregulation of Canada Post
Corporation.
It examines several questions:
- What have the experts said about the role of the ‘exclusive privilege’ in Canada and the likely
consequences of deregulation?
- Are there lessons that can be learned from existing experiences with postal liberalization?
- What would the impact of postal deregulation in Canada be on employees, the postal service, customers and
the public?
- How should the union respond to the prospect of deregulation?
