01) EU POSTAL PRIVATIZATION: THE FUTURE FOR CANADA?

 

Special to PV, based on a report by Christoph Hermann, in www.globalresearch.ca

 

            Virtually everywhere in the major capitalist countries, the drive towards privatization of formerly public assets continues to wipe out jobs, services, and government revenues. The "restructuring" of Canada Post announced in December follows a similar pattern, leaving the door wide open for private delivery companies to expand even further into this sector of the economy.

 

            A look at the European Union helps to understand where this trend is leading.

 

            The final elements of the old national postal delivery monopolies are being eliminated across the EU, concluding a lengthy process of the "liberalization" of postal services. While the "letter markets" are still dominated by the former national post companies (some of which have been privatized), new competitors are gaining ten per cent of the market share or more, with negative results for the public, small business, and postal workers.

 

            The traditional post office network has been largely replaced with private partners such as grocery stores or gas stations, offering a reduced range of services. In Germany and the Netherlands, the former national companies have given up their own postal outlets.

 

            With few exceptions, the new competitors emerging from the liberalized market never opened post offices or installed letter boxes. Instead they pick up mail directly from their large corporate customers, and typically deliver only two or three days a week in highly populated areas.

 

            Prices for large customers such as banks, telephone companies and online retailers have decreased, since they can negotiate individual rebates. But standard mail costs have increased in a number of countries. Even so, in spite of automation and drastic cuts in labour costs, several former national companies are struggling to break even, because of decreasing letter volumes and market losses to new competitors.

 

            The only delivery businesses doing well have a major stake in the booming parcel and express services market, such as Deutsche Post with its subsidiary DHL Express.

 

            Postal liberalization has not improved services and reduced prices. Instead, liberalization has produced a few winners - private shareholders of former public monopolies, managers and large customers - and many losers, including private households (especially in rural areas), and postal workers.

 

            Liberalization has reduced employment dramatically since the late 1990s. In some cases, the job cuts amount to as much as 40-50 per cent, and typically for 20 to 30 per cent. Contrary to the European Commission's prediction, these job cuts were not offset by job growth among new market entrants.

 

            In the Netherlands, 34,000 near‑full‑time jobs were lost at Dutch Post compared to 22,000 part‑time jobs created by the new competitors. In Germany, 38,000 mostly full‑time jobs have been wiped out in the letter market since 1999, while the new market entrants have created 16,308 full‑time equivalent jobs. In Sweden, 1,740 full‑time equivalent jobs were created by the new competitors, but 12,000 jobs were lost at Swedish Post between 1998 and 2008. In Spain, 4,000 full-time job losses are "balanced" by an equal number of mostly part-time jobs created by the new competitors.

 

            The former national post companies have increased the proportion of part‑time workers. Dutch Post has shifted to a mail delivery model based on 85 per cent of the workforce employed on part‑time contracts. In Cyprus and Lithuania, nearly 60 per cent of workers employed at the former national post companies work part‑time, and in Latvia and Luxembourg about 40 per cent.

 

            Part‑time work is even more widespread among the new competitors. In Germany and Spain, the new market entrants mainly operate with staff who often work less than half‑time jobs. In the Netherlands, the new market entrants hire mainly "self-employed" workers for just a few hours per week.

 

            In Austria, new market entrants almost exclusively operate with "self‑employed" mail deliverers. Workers in this category account for slightly more than 50 per cent of the new competitors' workforce in Poland. "Self‑employed deliverers" suffer from a lack of employment protection and social security, and are also paid extremely low, piece‑rate‑based wages.

 

            In the parcel and express service industry, much of the workforce are self‑employed drivers paid at piece rates. Both the new companies and the former national post companies contract "service partners" who, in turn, hire self‑employed drivers to carry out the delivery tasks. In 2010, 85 per cent of the parcels sent through Dutch Post were delivered by subcontractors.

 

            Some former national companies also use temporary employment, including Malta (where 32 per cent of the workforce of the former public postal company are employed on a temporary basis), Estonia (21 per cent), Greece (18 per cent), Poland and Ireland (14 per cent), the Czech Republic (13 per cent), Finland (12 per cent), and Portugal (9 per cent).

 

            Some former national companies cut wages for workers hired after a certain date in the liberalization process (in Germany minus 30 per cent after 2001, in Austria minus 25 per cent after 2008). In others, wage cuts were decreed for new job categories, such as assistant or auxiliary mail deliverers, who earn 40 percent less in the Netherlands.

 

            The wages paid by the new competitors are usually still lower than the reduced wages of the former national companies. In Germany and Austria, the difference is about 30 per cent, while in Spain it may have risen to 50 per cent since the economic crisis.

 

            Liberalization and new surveillance technology have led to a far‑reaching deterioration of working conditions. This includes the extension of delivery routes, and under‑staffing in post offices and sorting centres.

 

            In the parcel and express service industry, self-employed deliverers need to cope with unforeseen difficulties, and also from working hours of up to 15 hours per day.

 

(The above article is from the February 1-14, 2014, issue of People's Voice, Canada's leading socialist newspaper. Articles can be reprinted free if the source is credited. Subscription rates in Canada: $30/year, or $15 low income rate; for U.S. readers - $45 US per year; other overseas readers - $45 US or $50 CDN per year. Send to People's Voice, c/o PV Business Manager, 706 Clark Drive, Vancouver, BC, V5L 3J1.)