Implications of Electronic Mail and Message Systems for the U.S. Postal Service Page: 7

Ch. 1-Summary .7

Labor Requirements

USPS is a labor intensive organization, with
labor representing about 85 percent of total
USPS costs. By making assumptions about
the kind of service provided by USPS, the divi
sion of labor among its employees, and their
productivity, it is possible to estimate the
labor requirements for projected future mail
volumes.
For the purposes of this labor force analysis,
OTA assumed that the kind of service pro
vided by USPS (service levels) would remain
constant. That is, there would be no change
in the number of delivery days (e.g., 6 days a
week), post offices (over 30,000), weekday win
dow service hours (typically 9 hours), or city
and rural delivery points (over 84 million).
OTA calculated the division of labor among
USPS employees by assuming that each func
tional group of employees would allocate their
time in the future the same as they do now.
That is, each employee group spends a certain
fraction of its time in activities that are in
dependent of the volume of mail ("fixed
labor"); most groups also spend time in ac
tivities that do vary directly with the volume
of mail ("variable labor").
OTA estimated variable and fixed percent
ages for each major group of USPS employees
from the USPS fiscal year 1980 Revenue and
Cost Analysis. The variable labor percentage
is based on the variable attributable cost from
the USPS analysis; the fixed labor percentage
on the sum of specific fixed attributable costs
plus all other institutional costs for each
employee group. The variable and fixed labor
percentages determined by OTA were re
viewed with USPS and found to be reasonable.
The overall cost split for the entire USPS
labor force was calculated to be 61 percent
variable and 39 percent fixed. Individual
employee groups varied from those independ
ent of USPS mail volume to those almost com
pletely dependent on it. As of 1980, 14,268
employees, or about 2.1 percent of the total
USPS labor force, had no activities that varied

with mail volume. Included would be head
quarters, regional, and inspection service
employees. On the other hand, almost all of
the activities carried out by clerks and mail
handlers varied with mail volume (86 percent
variable/14 percent fixed). In fiscal year 1980,
this group included 303,560 full and part time
employees, or about 45 percent of the total
1980 USPS work force of 667,000 employees.
The clerks and mail handlers would have lim
ited participation in a Generation II EMS
service, which would bypass many of the tradi
tional mail sorting and processing functions
performed by clerks and handlers. The hard
copy output of Generation II EMS would still
require physical delivery by city or rural
carriers.
Most other employee groups fall in between,
having some activities that vary with total
USPS delivered mail volume (conventional
plus Generation II EMS) and some that do
not, but with a larger fixed component than
clerks and handlers. These would include su
pervisory and technical personnel (48 percent
fixed), city delivery carriers (50 percent fixed),
maintenance personnel (about 55 percent
fixed), and rural delivery carriers (73 percent
fixed).
With respect to productivity, OTA assumed
an average labor productivity improvement of
1.5 percent per year as a baseline. For com
parison, USPS labor productivity is credited
as increasing by roughly 3 percent annually
during the 1970's, as measured by the number
of pieces of mail per workyear. In fiscal year
1970, 741,000 postal employees delivered 85
billion pieces of mail, while in fiscal year 1980,
667,000 employees delivered about 106 billion
pieces. The 3 percent figure may not reflect
true labor productivity since service levels did
change. For example, mailbox collection fre
quencies (per day) were generally reduced and
cluster boxes were substituted for home de
livery in many new suburban residential de
velopments. Still, between 1971 and 1980 the
number of city delivery points increased by