WSJ.com: If this were a private business, the obvious response to these losses would be urgent cost-cutting to avoid insolvency. Instead, Postal Service management recently concluded negotiations offering the 205,000-member American Postal Workers Union a new four-and-a-half-year contract that will provide a 3.5% pay raise over three years, dole out automatic cost of living wage hikes after 2012, and expand no-layoff protections.
Postal officials say this is the best deal they could get and that, had they not agreed to it, an arbitrator would have been even more generous to the union. But given that 80% of postal costs are for wages and benefits, this contract is unhinged from all fiscal reality.
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