Postal workers get wage hike, but labor sees a setback

Labor suffered a sharp setback in its fight against lower starting pay for newly hired workers when, on Dec. 24, arbitrators in a contract dispute between the United States Postal Service and two of its largest unions issued a binding award giving those now employed modest wage increases but sharply reducing pay for new employees.

The unprecedented ruling, the first of its kind in a dispute involving the federal government, ended a five-month impasse in bargaining covering more than 560,000 employees. It will cost the Postal Service an estimated $4 billion over three years.

And it could force another mail rate increase by 1990.

A higher labor cost was anticipated earlier this month when the Postal Service announced that first-class postage rates would go up to 22 cents on Feb. 17.

After the arbitration award in Washington, Postmaster General William F. Bolger said it will ''likely make it extremely difficult to hold off the new rate for four or five years.''

The award was received with mixed feelings on both sides. Officials of the American Postal Workers Union and National Association of Letter Carriers expressed general satisfaction with the wage increase of 2.7 percent annually over three years and a cost-of-living adjustment expected to yield an additional 3.3 percent a year.

The unions deplored the award, however, for sanctioning a ''two-tier'' system of pay that will allow new employees to be put on the payroll at rates estimated to be $3,000 to $4,500 a year below those for postal workers already on the payroll.

Labor leaders generally expressed dissatisfaction with the arbitrators' award because it approved a pay cut for new postal workers hired after Jan. 18, 1985.

The two-tier wage system has become an issue in a number of industries seeking to reduce high labor costs. Employers contend that cutting starting pay is a fair way to hold down costs because wages of those already employed would not be affected.

Unions strongly oppose lowering starting pay because, they say, it could endanger jobs of higher-paid employees and might eventually undermine the entire wage structure.

The Postal Service expressed general satisfaction with the award by a panel headed by Clark Kerr, a former president of the University of California and a veteran of fact-finding and arbitration in national disputes.

But postal officials said they considered the probable three-year cost of about $4 billion to be so high that it now becomes ''impossible to say what the eventual cost to the American public will be.''

The Postal Sevice originally sought a three-year wage freeze to bring its wage structure closer to that in private employment. Unions sought a 20 percent increase over three years.

Bargaining involving the Postal Service and the Postal Workers, representing 290,000 workers, and the Letter Carriers, negotiating for 195,000, broke down on July 20 when previous labor contracts expired.

Several smaller unions representing about 75,000 workers with separate postal contracts are now involved in federal fact-finding, with a decision expected shortly.

The dispute settled Dec. 24 went to binding arbitration Oct. 19.

Postal workers are barred from striking because the service operates in part with federal money; their status is therefore the same as government employees, who by law are barred from striking. Federal law also requires that pay in the Postal Service be comparable to that for similar work in private employment.

Before the start of bargaining, a government board called Postal Service wages out of line with those in the private sector and admonished the agency against further overgenerous increases.

The Postal Service cited the order to reduce costs throughout the months of impasse that led finally to binding arbitration.