Postal service compensation and the comparability standard

Abstract

The directive of the Postal Reorganization Act is to maintain compensation similar to that awarded for comparable levels of work in the private sector. This paper examines a wide array of recent evidence to assess the comparability of postal and private sector compensation. The evidence points to a substantial postal premium. Cross-sectional analysis controlling for worker characteristics indicates that bargaining unit postal employees receive wages 28% higher than similar private sector workers. A premium estimate of 34% is obtained following an accounting for occupational skill requirements and working conditions, while inclusion of fringe benefits increases further the size of the premium. Longitudinal evidence from the Postal New Hire Survey, matched CPS panels, and Displaced Worker Surveys indicate wage gains of 30%-40% among postal entrants. Data on quit rates and applicant queues reinforce the conclusion that postal workers receive substantial rents. We explore in depth methodological issues, with particular attention given to the choice of the comparison group with whom postal workers are most directly compared. Many of the issues analyzed here have general applicability to studies of wage comparability.

Match Bias in Wage Gap Estimates Due to Earnings Imputation

“…This approach comports well with comparability laws mandating public sector compensation equivalent to that for similar levels of work in the private sector. Discussion of the issues involved is contained in Hirsch et al (1999). Note.-Data are from the 1996-2001 monthly CPS-ORG earnings files.…”

Reconsidering union wage effects: Surveying new evidence on an old topic

“…Postal Service workers and similar levels of work in the private sector (as required by statute) control for union status would effectively compare union postal workers to unionized private workers (i.e., postal workers would be credited with a union "endowment" variable in the same way they are credited with schooling or experience). Exclusion of a union control would effectively compare postal workers to a weighted average of union and nonunion workers throughout the private sector (Hirsch et al, 1999).…”

What Do Unions Do for Economic Performance?

“…Postal Service, in each of which unionized workers have captured regulatory rents (Hirsch, 1988;Hirsch and Macpherson, 1998;Hirsch, et al, 1999).…”