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

66 Implications of Electronic Mail and Message Systems for the U.S. Postal Service

case, the fixed percentage for postmasters
would be lower than the 81 percent shown in
table 12.
Costs for the 303,560 clerks and mail han
dlers (full and part-time) would vary sig
nificantly with conventional mail volume. The
clerks and mail handlers represent the one
employee group with very limited participa
tion in a Generation II EMS service. Genera
tion II would bypass many of the traditional
mail sorting and processing functions per
formed by clerks and handlers, but would still
require physical delivery (whether by city or
rural carriers). The cost split for the clerks and
mail handlers is 86 percent variable/14 percent
fixed. Most other employee groups would vary
significantly with total USPS delivered mail
volume (conventional plus Generation II
EMS). This would include supervisory, main
tenance, and technical personnel plus the city,
rural, and special delivery employees. A total
of 320,028 employees, or about 48 percent of
the total USPS labor force, are in this cat
egory. This includes part time and casual em
ployees who function in part to help the USPS
accommodate to fluctuations in mail volume,
for example, at peak holiday mailing periods.
The equation used by OTA to calculate labor
requirements, given the variable labor cost,
labor productivity, and projected mail volume,
is provided in appendix C. In order to simplify
this analysis, clerks and mail handlers were
assumed to vary with total USPS delivered
mail volume, not just with conventional mail.
This will tend to understate the projected
change in requirements for clerks and mail
handlers and in the total USPS labor force.
Figure 11 presents the projected overall
USPS labor force changes for the years 1985,
1990, 1995, and 2000 under the baseline high
but plausible Generation II EMS growth alter
native, and assuming 1.5 percent annual labor
productivity improvement. The projected in
crease or decrease, expressed as a percentage
change in the total USPS labor force, is shown
for each of the various sensitivity assumptions
used in chapter 4 to develop the USPS de
livered mail volumes on which the labor re

quirement calculations are based. (See fig. 7
for the corresponding mail volume projec
tions.) The projected labor force reduction
ranges from 2.7 to 22.8 percent in 1995, and
from 13.8 to 34.3 percent in 2000. The base
case (assuming 2 percent underlying mail
stream growth) falls roughly in the middle of
the range, with a 12.2 percent labor force
reduction projected for 1995 and a 23.3 per
cent reduction projected for 2000.
For the base case, this translates into a
reduction of 81,352 employees by 1995 and
155,370 employees by 2000. By comparison,
between 1971 and 1980 the USPS labor force
declined by roughly 65,000 employees. Thus,
the projected rate of reduction under the base
case (high but plausible Generation II EMS
growth, 2 percent underlying mailstream
growth, 1.5 percent per year labor productivi
ty improvement) over the next two decades
would be higher than the rate of reduction ex
perienced during the last decade. However, as
shown in figure 11, if the underlying mail
stream growth is 3 percent rather than 2 per
cent, the labor force reduction in 2000 would
be 13.8 percent or 92,022 significantly less
than the rate of reduction experienced in the
1970's. On the other hand, if the underlying
mainstream growth rate turned out to be 1 per
cent or if USPS did not deliver industry Gen
eration II hardcopy output, the labor force
reduction would be about 30 percent, which
translates into 200,000 employees.
Of course, if 3 percent per year labor pro
ductivity improvement is assumed, the pro
jected labor force reductions would be even
higher or, if zero labor productivity improve
ment is assumed, labor force reductions would
be lower. The sensitivity of labor force re
quirements to both labor productivity im
provement and underlying mainstream growth
rate is illustrated in table 13 for the high
Generation II growth alternative. As shown,
with 3 percent annual growth in the underly
ing mainstream and a zero percent annual labor
productivity improvement, no reduction and
indeed a small increase in the labor force re
quirement is projected for 2000. At the other
extreme, with 1 percent underlying mail

United States. Congress. Office of Technology Assessment. Implications of Electronic Mail and Message Systems for the U.S. Postal Service. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc39480/. Accessed October 30, 2014.