What Are the Things That Determine COLA for Postal Workers?
Postal workers in the United States are represented by a collection of different unions on both state and national levels. These unions collectively address the terms of employment for their members, part of which looks at how postal workers are paid. As well as rates of pay, seniority and hours of work, many union members receive a cost-of-living allowance. Several factors influence the level of this COLA benefit annually.
Cost of Living Allowance
A COLA benefit is a periodic adjustment of pay rates based on changes to the consumer price index. An effective COLA package keeps the buying power of a given wage in line with inflation. COLAs are generally a job perk or feature of a collective bargaining agreement or government payments such as Social Security. The various unions representing postal carriers, handlers and clerks include COLA benefits for their members.
Collective Bargaining Agreements
Three unions represent the majority of postal workers. The American Postal Workers Union represents over 220,000 workers and retirees, the largest postal union in the world. The National Rural Letter Carriers Association has a membership over 104,000 and the National Postal Mail Handlers Union represents 47,000 mail handlers. These national-level unions negotiate and enforce contracts with the USPS, including wages and COLA agreements. Terms of each CBA cover how COLA benefits are calculated and paid out to members of each union.
Consumer Price Index
The Bureau of Labor Statistics, part of the U.S. Department of Labor, compiles a measure of change for prices paid by urban consumers for a standard collection of goods and services. When the cost of these goods and services go up, the same wage has less buying power. This is why postal unions use the CPI as the basis for COLA adjustments. A rise in the CPI determines an increase in wages under terms of the various CBAs, keeping union members' wages adjusted to maintain buying power.
How COLA is Calculated
As the CPI rises, postal workers receive pay increases. CBAs determine when the increases take place. For example, the APWU agreement specifies the first pay period after both January and July CPI releases. The rate of increase is tied to a specific CPI increase, such as one cent per hour, for each 0.4 point increase in the CPI, as in the APWU agreement. If the CPI drops, workers do not take a pay cut when their respective CBAs includes this provision. The COLA benefit is typically applied independently from other wage increases, such as pay scale or performance merit increases.
- United States Postal Service: Postal Facts
- Breitbart: Unionized Postal Workers to Receive Nearly $1K Cost of Living Adjustment
- APWU: About the American Postal Workers Union
- National Postal Mail Handlers Union: Our Union
- Bureau of Labor Statistics: Consumer Price Index: Addendum to Frequently Asked Questions
- APWU: Collective Bargaining Agreement
A full-time content creation freelancer for over 12 years, Scott Shpak is a writer, photographer and musician, with a past career in business with Kodak.