Introduction: Corporations, Unions and Privatization
In August of 1998, more than half a million workers, including teachers, port workers and bus drivers in Puerto Rico staged a two day general strike and militant street demonstrations to protest the proposed privatization of the nation's public phone company through a sale to the U.S.-based General Telephone and Electric (GTE). The island nation's residents labeled the sale "the ultimate privatization," and more than 70 percent opposed it. While the workers defied many observers' expectations by giving up two days of pay for "a dial tone and a monthly bill," the sale itself also defied popular stereotypes about privatization.
Puerto Rico's phone company was modern, not a colonial relic. It was profitable, bringing millions into government accounts. Puerto Ricans had nationalized and modernized phone service during the 1970s and were proud of the results. But Governor Rosello risked public wrath to sell it to a transnational corporation, and he succeeded.
Though U.S. workers are unlikely to strike over the fate of their post office, there are interesting parallels between the Puerto Rican phone case and the current efforts to privatize the United States Postal Service. Like Puerto Rico's phone company, the USPS is successful and modern and produces surpluses. The investment the public has made in research and development of postal technologies has revolutionized mail sorting. Yet corporate and government leaders are advocating contracting most postal operations out to private businesses. In both cases, the privatization will benefit industry, not citizens, and the corporations appear to have the power to push their agenda through legislative bodies.
Unions in both cases find themselves at the center of a huge public policy debate. They are called upon to explain the nature of privatization, which has been represented in the past as a method of cutting government costs or as a program of right wing ideologues. But these old explanations do not work when the most lucrative government operations are the ones on the table and when mainstream liberal politicians are supporting the change.
Workers certainly see a threat to their wages and working conditions, though, as union organization in the public sector and leverage with political representatives have allowed them to achieve incomes and protections far better than the low-wage employees of private contractors.
Union members are challenged to do something more than defend their wages and conditions in these circumstances: they are challenged to define and defend a "public interest" in their industry and in the nation. Governments, according to 20th Century liberal ideologies, are supposed to defend the public interest by balancing a variety of social interests. Increasingly, though, corporations are defining society's goals and are making crucial decisions over the public good. There appears to be no strong counterbalance to their influence.
Corporations exist for one reason: to make a profit for their stockholders. It would be unreasonable to expect them to balance social goals, and few would claim that corporate decision making represented a kind of democracy on which a whole society should be based. But when governments consult with and listen primarily to big business interests, can the outcome be balanced and democratic? Can it serve the economic interests of a varied public? How can the interests of workers be protected?
This study examines the question of whose interests are represented by proposals to privatize and restructure the United States Postal Service. It looks at the actions supporters of privatization or commercialization have taken to advance their interests in government and at case studies of private contracts and postal rate restructuring. Based on the conclusions of the previous sections, it suggests ways that postal labor unions might be effective in defending a publicly-run postal service.
Chapter One looks at the history of private business' interest in postal services and at the postal labor unions' development. It examines the relationship of postal privatization to the global interests of transnational capital and shows that privatization is not an attempt to solve an internal USPS crisis.
Chapter Two examines the continuity between the 1970 postal reorganization and current privatization efforts. It examines the corporate interests, rather than the interests of the postal residential customer, that have been pursued through the USPS' formal governance system -- the Board of Governors, and through its informal systems -- the special task forces.
Chapter Three studies recent privatizations of postal mail processing operations, through direct contracting and through rate changes which promote the growth of the private mail sorting industry. It shows the direct benefits to private contractors and the losses to the public sector and to workers that result from the influence of contractors and private industry on postal policy.
Chapter Four examines the response of the postal unions, especially of the American Postal Workers Union, to actual instances of contracting. It looks at union attempts to organize private sector workers into unions and proposes organizational and political strategies that can be advanced by postal unions to broaden the support for public postal services and to defend the incomes and work life quality of postal workers.
Postal privatization provides an important case study to help us understand the realities privatization. While the USPS case may not be relevant to every instance of government contracting or sale of resources, important lessons can be learned from looking at the practices of the country's tenth largest corporation, which happens to belong to its citizens.
The author worked for the USPS for 12 years and was a union steward and local officer of the American Postal Workers Union for nearly all of that time. The recommendations made in this paper are specifically aimed at APWU union activists, local and national, who find themselves in the middle of this controversy, though they may also have relevance for union members in other areas of public service.