U.S. Post Office mailboxes in Chicago
U.S. Post Office mailboxes in Chicago - 
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Scott Jagow: Yesterday, the U.S. Postal service reached a new five-year labor contract with its mailmen and women. The two sides agreed to stop giving city delivery routes to private contractors for the next six months. Jill Barshay has more.

Jill Barshay: Two years ago, just 2 percent of the nation's deliveries were handled by private mailmen.

But the postal service is under pressure to cut costs. It's handing more delivery routes to private contractors. Murray Comarow was an executive director of a presidential postal reform commission.

Murray Comarow: Any time the postal service can save a dollar through lower labor costs, that tends to hold down the price of a stamp, because 80 percent of the cost of a stamp goes to labor.

Bill Young is the president of the National Association of Letter Carriers. He says the postal service just wants to avoid paying benefits.

Bill Young: That's just a way of forcing people to work without health insurance and without retirement.

Postal unions and management will now sit down to try to agree on where to use private contractors in the future.

In New York, I'm Jill Barshay for Marketplace.