The Public Policy
Free the Mails
Time for a private option at the U.S. Postal Service.
Yet another giant company has plunging sales, soaring debt, and is weighed down by massive labor costs. Will taxpayers have to pay for another federal bailout? Alas, it’s already in the cards because this company is the U.S. Postal Service, which has estimated losses of $7 billion this year.
With email grabbing ever more market share from snail mail, USPS’s finances are steadily deteriorating. What should federal policymakers do? They can’t give USPS the General Motors treatment and nationalize it, because it’s already government-owned. And they can’t reform postal markets with a “public option” because that’s what the USPS already is.
Instead, Congress and President Obama should deregulate postal markets and privatize the USPS. It’s true that such pro-market reforms are not in vogue these days, but Obama claims that on economics, he doesn’t want to “get bottled up in a lot of ideology…my interest is finding something that works.” For postal reform, that means injecting competition by allowing “private options” in the marketplace.
We know that postal deregulation works because it’s already in place abroad. Postal services have been opened to competition in Britain, Finland, New Zealand, and Sweden. In those countries, private operators are starting to challenge former monopoly mail providers, particularly on business mail delivery.
In Germany and the Netherlands, the main postal companies (Deutsche Post and TNT Post respectively) have been privatized, allowing them to expand into foreign markets and diversify their services. These two countries haven’t yet leveled the playing field for competitor firms, but that reform should be coming soon.
That’s because the 27 member nations of the European Union have agreed to end their mail monopolies by either 2011 or 2013. Some countries are dragging their feet, but it appears that the wheels are in motion for the Europeans to soon have a much more dynamic postal sector than the United States.
An analysis by the Consumer Postal Council found that U.S. postal markets are the third most regulated among 19 countries examined. The main regulatory shackle is the USPS’s legal monopoly over first-class mail. That restriction makes no sense in today’s economy. It simply deprives consumers of the innovations and cost savings that could be brought to the mail business by entrepreneurs.
The good news is that the choke-hold that the USPS has long had over personal and business correspondence has ended. USPS’s mail volume peaked in 2006 and will probably never recover. These days, people communicate via email, text messages, and other electronic tools. The share of bills that U.S. households pay online is already 38 percent and rising fast.
The bad news is that we’ve still got a 700,000-worker behemoth to deal with. We can let entrepreneurs into the market to bring new efficiencies to letter delivery, but we still need to downsize the USPS. In most industries, businesses facing declining markets can radically cut costs and innovate to survive. But the USPS can’t do that effectively because it is beholden to members of Congress and their parochial concerns.
Plans to close down some of USPS’s 37,000 retail locations across the country are usually met with resistance on Capitol Hill as members defend the facilities in their states. And recently, the USPS floated the idea of cutting mail delivery to five days, but members haven’t embraced that cost-cutting idea either.
At the same time, USPS managers try to avoid tough financial decisions. Right now, for example, the USPS is asking Congress to suspend a legal requirement that it pre-fund its huge unfunded health care liability. However, that would just dig a deeper financial hole for the organization down the road.
And then there is USPS’s difficulty in cutting its massive labor costs. The average USPS worker earns $83,000 per year in compensation, as union deals have delivered regular wage and benefit increases over the years. The Government Accountability Office recently noted that “compensation and benefits constitute close to 80 percent of USPS’s costs — a percentage that has remained similar over the years despite major advances in technology and the automation of postal operations.”
A privatized USPS would have the incentive and freedom to tackle such long-standing inefficiencies. At the same time, competitor firms would give households and businesses alternatives to the USPS’s regular postal rate increases. It’s time to end America’s last great monopoly and free the mails.
(Cato economists Chris Edwards and Tad DeHaven maintain www.downsizinggovernment.org.)
Darin| 8.28.09 @ 7:07AM
The Postal Service could easily become profitable. Some politically-incorrect but sound business decisions would be as follows.
Eliminate the unions. As was done with the auto industry, unions are killing it. Get rid of them. Now.
Eliminate/consolidate unprofitable post offices. How many small towns have their own post office? Is this really necessary? Convenient, perhaps, but necessary? Roll the function into a local Wal-Mart or some such store and pay a lease. Wal-Mart gets extra foot traffic, fixed costs are shared, and the branch office can set their own hours based on needs.
Optimize delivery route. Mail carriers sometimes drive 100 miles to reach a single house. This is done every day "just in case" that house has mail to send. Schedule deliveries something like this:
- reduce deliveries to a max of 5 days/week.
- 5 days/week within 30 mile radius of post office.
- 3 days/week within 75 mile radius.
- 2 days/week others.
Look at placement of external mailboxes and eliminate/consolidate as necessary. Also look at pickup schedules and limit to no more than once/day.
Look at stamp revenues to determine if it is profitable to maintain so many different types to "appease collectors." May be far cheaper to only make the "forever" stamp in two formats; regular mail and postcards.
Big J| 8.28.09 @ 8:00AM
Another glaring example of what happens to an industry when Big Brother gets his claws into it. Inefficiencies, poor service and operating at a substantial deficit are just a few casualties of nationalization.
An excellent preview of the public option.
Can't wait for that one.
Bram| 8.28.09 @ 8:05AM
Who cares (other than postal employees) if a privatized postal service makes a profit or goes bankrupt? I assume Fed-Ex, UPS, and others would quickly annihilate them in open competition. That's okay with me, better service and $7 Billion less in wasted tax-dollars.
Lullabys, Legends and Lies| 8.28.09 @ 9:15AM
I wonder what the average FED-EX, UPS employee makes in comparison to USPS? I’m guessing less, but amazingly FED-EX & UPS both make profits and USPS doesn’t. How would that be possible?
It’s time to clean house at the United States Postal Service, cut wages, cut jobs, cut locations, cut daily deliveries, and when you’re done with that, cut something else.
Interested Conservative| 8.28.09 @ 11:02AM
Commentary about privatizing the mail without a mention of Lysander Spooner? Maybe it didn't make it out of Cato's editing, but it's worth reexamining what could have been to see what should be.
Big Leo| 8.28.09 @ 12:21PM
"Look at stamp revenues to determine if it is profitable to maintain so many different types to "appease collectors." Appease collectors? I never noticed that we were a major pressure group. It's more like hit collectors for several hundred dollars a year apiece to maintain a complete collection. Every study ever done has shown that collectors subsidize the postal service by millions of dollars a year. These same issues also educate our own people and the world about what we consider significant and important in our society (the Simpsons, apparently). It is also how we honor and commemorate our history and our heroes.
Sleep Apnea Tips | 8.28.09 @ 12:25PM
Please tell me that 83K average refers to both pay AND bennies. It can't possibly mean 83K average pay.
We are bombarded with media from the left asking why we don't do health care like our enlightened "peers" in Europe. I wait patiently for our betters to ask why we don't do mail like our "peers in Europe.
ken in people's republic of MD| 8.28.09 @ 12:54PM
As a member of the USPS for 12 years before finally escaping in 2006, I can tell you it is a bloated organization filled with bureaucrats making inane decisions daily. Ask any carrier about DPS and you'll get the same answer, the worst thing to hit the service in its history. And yes it is true that the union cannot deny its complicity in helping to ruin what was once a fine organization. Unfortunately, the Post Office has turned into the butt of so many jokes, the seeming home of junk mail, and an easy excuse when some deadbeat doesn't pay his bill on time("It most be lost in the mail").
But truth be told, the Post Office does operate under some severe handicaps. It is a stand alone business, meaning it gets no help from Congress. The office of Post Master General used to be a cabinet post, it is no longer, hasn't been since the great re-organization of 1969.
The very nature of its business, human beings out in the elements delivering pieces of paper and bundles, does take its toll on those human beings. The Post Office has a generous leave system, where employees get not only vacation leave but also sick leave, to the tune of, at the start, four hours of both every paycheck. There are veteran carriers with thousands of sick leave hours built up over their careers, and yes, there are many examples of those carriers "retiring" on sick leave. When you leave the Post Office, you get your unused vacation time back, but not your unused sick leave. So they use it. Or, if something catastrophic happens, carriers use their built up sick leave and might be off the job for months at a time. When you are walking around, sprained ankles, strained knees, muscles, backs are commonplace. It is the way it is. The Post Office discourages the use of sick leave, but people still need to use it. And the USPS being a quasi-government entity, promotions and raises are based on tenure and seniority rather than merit. Therefore, there are many carriers sliding by, under cover of the union. But, to be fair, for every one of those, there are hundreds of dedicated employees doing their job to the best of their ability. But in an organization with almost a million people, there's a lot of dead weight.
As much as I didn't like working for the Post Office, I have to admit that its prices and services are among the best in the industry. Its first class stamp price is the lowest among all nations with a national letter delivery system, its flat rate pricing means it costs the same to send a package across the country as it does across town, and its cost to send the package across town is very, very competitive.
What's more, the Post Office labors under Express Mail requirements. For example, we would have to go in on Sundays to deliver Express mail pieces either undeliverable from the day before or new mail that is desired to be delivered on Sunday. The basic express mail piece costs $13.65, the carrier delivering it, usually a FNG, is making the lowest hourly rate of around 20 bucks an hour, so right there, the service takes a loss. And often, there might only be one or two pieces to be delivered within that carrier's zip code. But it is the mandate under which the P.O. must operate. And let me tell you, of all the services the service offers, I heard the most compliments and thank yous from people who needed that piece of mail. Airline tickets, even football tickets have been delivered that way. But it is a money loser for the USPS. Would an accountant working for a for-profit private company put up with that?
During the week, express mail must be delivered before noon, meaning a carrier must often break his delivery pattern to get that piece in the hands of the customer on time. That costs money. But it is a great service and many a customer makes use of it. But should the Post Office get rid of a vital, if expensive, to the service, product? Tough question.
When UPS went on strike in the mid-90s, the USPS picked up the slack without a noticeable reduction in efficiency. And many of those customers stayed with USPS even when UPS came back to work.
So there is a lot good to say about the United States Postal Service. But also, a lot bad to say about it. I do wonder if their current management teams are capable of steering the service into the future. We used to call management "The Dark Side", and often marveled about the lack of common sense. I used to tell one manager, a decent person but still a manager, that every time he opened his mouth, he set management principles back a hundred years. And he knew it.
I guess there will always be a need for some kind of postal delivery system, I do wonder if there's a better way.
Sheila| 8.28.09 @ 2:13PM
Despite the long list of excuses provided by Ken in the People's Republic of MD, the USPS is an outdated, overfunded, underworked monopoly. Ken, I think you have absorbed more the MD and USPS mindset than you might think. I have many relatives up in the People's Republic of Massachusetts who work(ed) for the USPS. Not one of them had an IQ above 100. Not one of them was a particularly hard or smart worker. All of them have cushy healthcare and retirement funds, and they all got their kids jobs at the USPS to continue feeding at the trough.
My local post office (or the 3 I'm closest to) are almost 97% immigrant staffed - primarily Chinese and Indian. Most of them speak extremely poor English, and spend lots of time conversing in their native tongues with fellow countrymen, while White Americans wait and wait and wait in extraordinarily long lines. I can't tell you how happy I was to deal with a Black female supervisor once - she was the epitome of courtesy and efficiency in contrast. And joy of joys, these pseudo-American USPS employees are in charge of issuing PASSPORTS - what a wonderful and secure situation for our country.
I gladly pay more to use Fedex and UPS whenever possible; I dread any requisite trip to the Post Office, and I eagerly wait for its demise - mostly so its hordes of lazy and incompetent workers have to find real jobs somewhere and learn to work for a living. My husband's employer has had numerous instances of fraud and theft and simply nondelivery dealing with the USPS, and got tired of calling for inspectors to come out and straighten out the mess. They now ship everything privately and split the cost with their customers.
So, Ken, YOU may have called management "the Dark Side;" the rest of us know you are the root of the problem. Believe me, there are lots of better ways - if you use better people.
JJ| 8.28.09 @ 3:28PM
Darin at 7:07 am gets my vote for Postmaster General.
JJ| 8.28.09 @ 3:30PM
I worked for the Post Office for several years. Without question the laziest, most unproductive people on staff or Union members and especially Union officers.
Pingback| 8.28.09 @ 6:45PM
Friday Links | Think Tank West links to this page. Here’s an excerpt:
Jack| 8.28.09 @ 9:24PM
As a 26 year veteran of the USPS, I can assure you that 83K per year for "the average USPS worker" would be a very high estimate indeed; and yes, every possible benefit including retirement, sick leave, annual leave, etc. would have to be figured in to get a number that high. I think 60-65K would be more accurate, but these numbers are hard to come by, easy to dispute.
But it's indisputable that postal employees never quit. We simply never leave the Service. Ten to fifteen years "seniority" is considered low. And why is this? Simple economics: our salaries are inflated far beyond what we could hope to earn elsewhere.
The dear old P.O. is indeed a showcase of government ineptitude; privatization is the only remedy. Ditto Amtrak, Social Securtity, public education and so on and on and on. Socialism don't work.
And the P.O. is a SHOWCASE of Affirmative Action! Oh the stories I could tell.
And what about our social-welfare program known as Money Orders? The USPS Money Order costs $1.10, while a similar product at a bank will cost eight dollars or so. The rising cost of stamps is subsidizing the low cost of money orders. The welfare segment use money orders to pay routine bills, in lieu of checks; they don't have bank accounts. So your stamps are subsidizing the cost of their financial transactions.
James| 8.28.09 @ 10:26PM
Tad DeHaven, who was affiliated with the National Taxpayers Union, actively advocates privatizing Social Security to force everyone to stock market investment accounts. Hey Tad, how'd your "social security" do in Q2?
Edwards and DeHaven won't say who is going to deliver your mail (BTW, Postal Service volume is only down 17% YTD last accounting)? UPS? Want to compare service (forget price, the Postal Service has them beat)? I would suggest asking UPS CEO Scott Davis how UPS did delivering those Harry Potter books against the US Postal Service in 2007. Have a good read: http://kottke.org/07/07/harry-.....m-delivery
UPS was overwhelmed just delivering to a fraction of normal Postal Service volume. UPS delivery personnel dropped books back at post offices and into USPS collection boxes because their carriers couldn't get them delivered. The Postal Service and its inspectors terminate employees who delay mail.
Compare USPS to postal Britain, Finland, New Zealand, and Sweden? Sweden (smaller than Alaska, which UPS does not serve) can only manage 94% on time, and they only deliver 5 days in some parts of their country, 2 or 3 days in others, a failing rate in the US.
Chris Edwards leaves out the details - funny, he was a consultant and manager with PricewaterhouseCoopers who (now part of IBM) independently track US Postal Service First Class Mail on time performance. It is over 96% on time.
In addition, for the fifth consecutive quarter, 93 percent of customers surveyed rated satisfaction with the Postal Service as “excellent, very good or good.” The premier privacy trust study in America has named the US Postal Service the “Most Trusted Government Agency” for an impressive fifth year in a row.
To sum up their employer Cato's policies: what's in it for me pal?
Privatizers like Edwards and DeHaven are the snake oil salesman of the modern age offering a greener pasture which only enrich their private portfolios. They never show you the real bill that you will be paying to may them richer!
Jack| 8.28.09 @ 11:09PM
James,
You wrote, "The Postal Service and its inspectors terminate employees who delay the mail."
No, they don't. In my 26 years at the P.O. I've seen plenty of mail delayed.
Getting terminated from the Post Office is an accomplishment of Herculean proportions. Generally, it requires chronic substance abuse, months of absenteeism, or on-going theft. Even in those circumstances it can be difficult to get yourself fired.
Fired for delaying the mail?? Exactly what kind of smoke are you trying to blow?
I have 26 years hands-on USPS experience. You?
UPS and FedEx can easily compete with the dear old USPS. The Harry Potter incident was an anomaly based on a one-time spike in volume, not indicative of overall performance.
The USPS subsidizes its parcel delivery with its first-class monopoly.
Ever watched a UPS driver make a delivery? He was MOVING, right?
We have letter carriers slower than molasses in January. Their jobs are rock-solid, never fear. They are protected by the union, by EEO, and by the Postal monopoly.
I've seen fully fledged alcoholics with chronic absenteeism, promoted to supervisory positions in my dear old Post Office. I could name names. I've seen supervisors come in every day wearing sunglasses indoors, reeking of cheap cologne, crunching on breath mints: to cover up the alcohol stink. Terminated??? Are you kidding?
Face it James, socialism, in any of its forms, don't work; sorry.
As for me, I've done my little job at the PO for 26 years, put two kids through college and grad school, and developed some rental property along the way. And never paid any union extortion dues.
Regards,
Jack
James| 8.29.09 @ 12:26AM
Sorry Jack, you don't know Jack. But, what's in it for you, right?
Sounds like you're anti-union - I'm sure you took a lower non-union negotiated salary and less benefits out of principle when you were on the postal rolls since the postal unions negotiated those hourly wage and benefits on your behalf, right? UPS certainly isn't anti-union.
FYI got you trumped by years in the years of service department and at a much higher level.
Not only have I personally initiated and pursued delay of mail cases successfully, but they are happening every day and people are being fired. Maybe the inspectors just didn't think they needed to advise you about it.
Did you ever give the inspectors a call to investigate the USPS employee misconduct you observed? You did have an obligation under the Federal Code of Ethics and oath you swore when hired... even at that lower non union hourly rate I'm sure you were getting...
I notice you don't quote any figures for delayed mail, alcoholism or other internal issues at UPS or FedEx. I've dealt with them and their managers in my USPS capacity - They have the same issues. You see, they hire humans too, they just don't take too kindly to advertising their problems.
UPS carriers did delay a bunch of those Harry Potter books - notice you didn't have anything to say about that link, and the thousands of others referenced in it who had nothing but bad things to say about UPS and that mailing.
Its your business if you are want to buy this baloney these Cato shills are dishing. But it is baloney. I've talked to hundreds of foreign born customers at campuses, busineses, etc and even execs at the IPC (yup, that high up).. who can't say enough about how superior the US Postal service is than the postal service provided in their home country.
Edwards and DeHaven don't post their personal financial portfolios for a reason. They stand to gain financially from what they are hawking. DeHaven is banking his "social security" replacement plan on it.
And that's why they hawk it, they just mask it in anti-government altruism for those who just don't know Jack.
Mike| 8.29.09 @ 1:21AM
Jack...
Eight bucks for a money order at a bank? USPS is bargain at 1.10? I can get the same thing a the Piggly Wiggly or Thom Thumb for 79 cents.
Mike Johnston
SFC USA (RET)
Charles| 8.29.09 @ 1:37AM
Memo to Tad "just a man on the street who won't get social security benefits unless I privatize it" DeHaven:
From Plunge Reveals Plan's High Risks
By Dean Baker
"Until the recent fall in stock prices, many people viewed the stock market as a money tree that created wealth out of nothing. This was the atmosphere in which the idea of private accounts within Social Security gained popularity. The crash has helped to clear people's thoughts.
In reality, the stock market does not create wealth. Wealth is created when we are better able to produce goods and services. Putting Social Security dollars in the stock market through individual accounts does not increase the nation's productive capacity by one iota, compared with putting the same dollars into the Social Security trust funds. As the crash shows, individual accounts only add risk.
The market crash also clarified which part of the retirement system needs fixing. Millions of workers who saw much of their retirement savings disappear in the crash are now very glad that they can still count on their Social Security. On the other hand, we now recognize that the system of private pensions is in disarray."
Find some other government instituition to bash out of frustration with your stock portfolio.
How about the defense department?
chen | 8.29.09 @ 1:37AM
Edwards and DeHaven don't post their personal financial portfolios for a reason. They stand to gain financially from what they are hawking. DeHaven is banking his "social security" replacement plan on it.
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And that's why they hawk it, they just mask it in anti-government altruism for those who just don't know Jack.
Chen| 8.29.09 @ 2:06AM
Here's another Chris Edwards analytical diamond to go with the idea of privatizing the Post Office :
"As pure politics, the Bush tax cuts are a textbook study in how to muscle bills through Congress. "It's unprecedented, the amount of tax-cutting Bush has done: Four tax cuts, four years in a row," says Chris Edwards of the Cato Institute."
And for a $2,000 a pop speaking fee, you can get these and other one-dimensional gems in person from Chris Edwards.
For my money, I'd rather pay to hear a more sober analyst, like Joel Friedman (who called the Bush shell game correctly right from the start), speak.
" But many economists say that making the Bush tax cuts permanent would reduce, not increase, the size of the economy in the long term. The problem is "the deficits tomorrow and in coming years when the babyboomers are retiring," says Joel Friedman, senior fellow at the Center on Budget and Policy Priorities. "The very people getting a few hundred dollars [in tax relief] now, in a few years will find they are paying for it more directly, as they face substantial fee increases" or program cuts.
Pingback| 8.29.09 @ 5:41AM
It’s time to privatize the post office « Free Market Mojo links to this page. Here’s an excerpt:
Mark A. Sadowski| 8.29.09 @ 8:11AM
Countries that have ended their mail monopolies didn't end the universal service obligation. Even privatized postal services like Deutsche Post and TNT Post are still under have a uniserval service obligation and as a result receive a subsidy from their respective governments. Iin a country with as many rural residents as the United States such a subsidy would cost billions and billions of dollars. And depriving rural residents affordable access to mail service could inhibit with their ability to file tax returns and to vote. It would raise serious legal and possibly Consitutional (Article I, Section 8, Clause 7) issues. Demonopolize and privatize away, but remember, there's no such thing as a free lunch.
If you don't think rural mail service is a big issue consider this story:
http://minnick.house.gov/2009/.....sion.shtml
Andrew| 8.29.09 @ 10:53AM
The article, and the comments, miss the key point that, with anything urgent NOT being handled by regular mail, every-other day delivery would be fine, thereby making half the carriers redundant!
Bored about privatized mail| 8.29.09 @ 11:32AM
Ever since Ronald Reagan
we heard talk about privatization. Quite frankly Im bored, because no other company has the capacity to deliver to EVERY house in America and make a profit! Here are a list of Questions to you fools who want privatization.
1) Who's going to deliver to grandma for 44 cents a letter, when she lives in a rural area, miles away from the nearest house???? Answer: NO ONE!
2)When I need to put my mail on hold, how many privatized companies do I need to contact?????
3) How many privatized mail carriers do I want walking across my lawn every day?
4) Can I trust the MULTIPLE carriers delivering my mail, making substandard wages? Will they be tempted to steal my financial information
5) Who do I call if I didnt recieve that check I was expecting, company A, B, C, D, E, or F??????
6) Will private companies "cherry pick" the profitable areas, and charge HUGE postage to deliver that letter to grandma in rural northern maine?
7) Do we want to fire 630,000 USPS employee's, to satisfy two right wing loons, who wrote this article?
James| 8.29.09 @ 12:01PM
No Andrew, the point is the Postal Service doesn't just deliver your bills, magazines and ad mail.
That's a giant mischaracterization which UPS and FedEx would like you to believe.
The truth is the Postal Service is capturing an ever increasing share of the Priority Mail and Express Mail markets and is poised to come out of the "neo-depression" handling much more of this lucratuve product line.
The demise of DHL and agressive Postal Service pricing of products such as the Priority Mail flat rate service (one prioce for evrything you can fit in the box) have taken market share from UPS and FedEx. Shippers like our pricing and demonstrated outstanding service and security.
Edwards and DeHaven represent interests funding the Cato institute which don't want the Postal Service, or Social Security or any government institution (except the defense department) to succeed. Tha's why they are writing this piece.
As for Sadowski's comments about other countries who privatizeed not ending their universal service obligation, postal services are simply not as good, as "universal" or as reliable in those countries. That is what the data and their own people say when they see the US Postal Service in action.
And lastly, and most importantly, what about the $7 billion "debt".
Edwards and DeHaven, and most of the others who don't know Jack, won't tell you the real story, but here it is:
"Despite cost reductions against the fiscal 2009 plan of more than $6 billion and actions to grow revenue, the Postal Service (USPS) projects a net loss of more than $7 billion at fiscal year-end.
The organization’s financial situation is compounded by its (now read carefully):
...obligation to pay $5.4 billion to $5.8 billion annually to prefund retiree health benefits. This requirement, established in the Postal Accountability and Enhancement Act of 2006, is an obligation that no other government agency has to pay."
UPS and FedEx and no other goverment agency is required to pre-fund their retiree health benefits a decade ahead of time.
And while you are thanking your congressional representative and those in the Cato institute for causing the mortgage meltdown by advocating and passing legislation watering down the government oversight of the mortgage industry (let private industry self-regulate!) , thank your congressional representative for this gem too.
There's more to the story:
"“Thanks to extraordinary efforts across the entire organization, the Postal Serive is well on track to achieve our 2009 target of more than $6 billion in total cost reductions,” said Postmaster General Potter. “In the third quarter, we surpassed the targeted amount by $500 million.”
Think UPS or FedEx have done that? Nope!
And here's the kicker:
"A provision in the Postal Civil Service Retirement System Funding Reform Act of 2003 (now read carefully):
transferred from the Treasury to USPS responsibility for paying the retirement benefits earned by postal employees when they were members of the armed forces, a $27 billion obligation.
USPS argues that the Treasury pays for military service credits held by employees of every other agency, and there is no connection between the USPS mission and that of the military. USPS points out that 90% of the obligation was incurred before USPS was established as an independent entity in 1971.
Do UPS and FedEx fund their employees pension costs for military time? Nope!
Actually, the US Postal Service is doing fairly well with record levels of service performance...let's privatize them before they take any more business from FedEx and UPS!
Pingback| 8.29.09 @ 4:57PM
The American Spectator : Free the Mails - Special Blog links to this page. Here’s an excerpt:
Postal Wife| 8.29.09 @ 7:27PM
As the wife of a 25 year postal worker, I've read through a number of these comments with much interest.
@Ken from MD - interesting. I particularly appreciated your post b/c you are broad-minded enough to look at the whole picture -- both the good and the bad of the post office. Having worked at the PO, you have an insider's perspective to share, and you support what you have to say with facts. I especially want to concur with your comment about management being from the dark side. There are some good people in management, but not enough to combat the overwhelming amount of poor management choices. I'll stop there. I congratulate you on escaping. ;)
@Sheila - your ill-informed, unsubstantiated response to Ken is sad. You certainly have a right to your opinion and the privilege to pay more for services elsewhere. Do so, and be happy. But if you want to spout opinionated bilge, support it with fact, not just unsubstantiated opinions.
@Jack - some of your observations about the workers who take advantage of union protections are quite true and just as frustrating to my husband. That you watch from some lofty self-created "I'm better than you" perch while you reap the benefits of union negotiated contracts (and yes, are still protected by that same union shield even though you are "too good" to pay your dues) however, makes me sick. Shame on you.
Unions, like any organization, have their faults. But you, Jack, are not much better than any other worker who takes advantage of union protections and ultimately gives unions a bad name.
@James - thank you for your thoughtful, well-informed, and illuminating posts. I hope that some of the uninformed who are communicating in this forum will only take the time to read and to learn from the information you've provided.
That being said, from a wife's perspective ... The post office is a case study of what NOT to do to effectively manage human resources. I won't comment on the management of postal operations. There is much that is good but obviously much that needs to be fixed. From a human resource perspective, they are horrible. There is no incentive or encouragement for employees (perhaps if there were, some of Jack's, Sheila’s and others’ comments in this forum would be moot). In the current climate, the USPS management is firing people for any reason they can find. "Writing up" long term employees for being AWOL (yes, they use military terms) for even fractions of a minute (So Jack's comments about not firing was particularly ill informed). Current articles keep talking about decreased mail volume (true) and the need to reduce an inflated work force, but no one is talking about how the recent cuts are affecting the work force still in place. The sheer logistics of getting mail sorted in time for trucks (and the series of delivery deadlines in between that eventually brings your package or letter to your doorstep) are mind boggling. By and large, to keep up with these while whittling the workforce, the postal service is working people to death. Literally. Machines that typically had two people running the mail-sort processes are often run by one person and, if they are lucky, a floating assignment might join them to assist in completing the process. The efficiencies previously in place by having teams that knew the combo on which they worked are obviously affected. I could go on. But I won’t.
By and large, there is much about the post office that the general public simply does not understand. The USPS is definitely in a state of change. For obvious reasons, I hope they survive the pains of transition. I also hope they make some significant changes along the way in not just their operations management, but also in the way the manage their human resources.
Mark A. Sadowski| 8.29.09 @ 11:17PM
The bottom line is that you'll see a Fedex truck or Brown in Frank Church River of No Return Wilderness, Idaho when freakin' hell freezes over.
Jack| 8.30.09 @ 12:28AM
James,
Yes, I am anti-union, since the union is little more than a shill for the Democrazi party.
Question to the union: do postal workers earn their wage? If so, then we are not indebted to the union for it. If not, then the USPS, and other union-controlled industries, are economically doomed.
In many respects the dear old USPS is doing a pretty good job. That's not at issue. The issue is this: could private industry do it better, cheaper. The answer is, yes.
On the other hand, if government can do the job better, then let's have the government control the auto industry, the health care industry, all the industries!! Then we'll be living in the workers paradise!! And Fidel Castro was right, all along!!
By the way, how would you know that you work "at a much higher level" than me, James? You inflate yourself.
Regards,
Jack
Jack| 8.30.09 @ 12:36AM
One more thing: when Postal managers working "at a much higher level" than me, use the word "fired," they mean: moved around laterally somewhere, or perhaps demoted. They don't mean "fired" as that word is used in private industry.
In order to get really FIRED from the USPS, you have to work hard at it, by chronically doping, stealing, dealing drugs, etc. And I mean chronically.
Dadicoot| 8.30.09 @ 1:43AM
THE USPS MADE A PROFIT LAST YEAR! The USPS posted a $2.5BILLION profit last year, but since it was required to place $5.4 Billion into a FUTURE retirement health care fund that already has $34 billion for employees that it has not even hired yet, it posted a loss! UPS FED EX are hurting in this economy also and they aren't prefunding anything! They would be crippled if they had to! 35% of USPS labor costs are MANAGEMENT! NOT UNION! The Union postal employee DOES NOT MAKE $83000 a year, that average includes the overpriced non productive 35%! UPS is TEAMSTER! its union workers are paid far more than USPS,but it has a fraction of the management of USPS. CUT THE FAT! NOT THE MUSCLE!
Dadicoot| 8.30.09 @ 1:56AM
Despise unions? Hate government? Well your solution lies just south of our border! Look how well trickle down private sector control of the government has worked the last 500 years in Latin America. WOW what a model! I would much rather be born in Canada than Mexico. Anybody who thinks full throttle unregulated private sector control is a healthy thing then you are in denial and have not been paying attention to all the bail-outs that has crippled OUR government and economy. We better pull our heads out or we will all be sneaking into Canada and cleaning pools , motel rooms and toilets
James| 8.30.09 @ 2:27AM
Jack, you still don't know jack, and the more you say, the more it becomes evident. Glad you're not with us any longer.
Postal Wife and Dadicoot are right on the money.
BTW - Higher level means EAS-25 at HQ and Area and have worked with other countries postal execs as well as those at FedEx and UPS .
I do know what I am talking about, unlike the authors of this article.
Pingback| 8.30.09 @ 9:01AM
Friday Links | Austrian Economics Blog links to this page. Here’s an excerpt:
usebypermission | 8.30.09 @ 10:55AM
In my opinion the post office does a good job! I'd rather bail them out than GM or AIG. By the time the WH is finished defeating capitalism and if they actually have clout left in their bread basket, then we will see a gov't take over of the transportation industry.
Richard Baker| 8.30.09 @ 10:58AM
Sleep Apnea:
Regardless, $83K has to be budgeted whether that is salary or the total compensation. Find a private company that can be so generous and is not either in bankruptcy proceedings, gone out of business, or soon to die. Unions may have had a place years ago, but now they are a millstone around the neck of business and these are the organizations which create the wealth and not the printing presses of the Mint.
Jack| 8.30.09 @ 2:31PM
James,
You and I are evidently on opposite sides of a debate that's been going on at least since T. Jefferson and A. Hamilton. Namely, how big should the government be, and how extensive its reach.
It can be argued the P.O. is a "natural monopoly," and should be a federal entity since the mails are interstate. But the federal government has gotten more and more loony and wasteful over the last several decades. (Do you by any chance vote Democrazi?)
Nowadays, sensible people even inside the P.O. are seeing that the feds need to be rolled back; extensively rolled back, wherever possible. That is one of the themes of the AmSpec. Are you a subscriber?
The feds have never been so loony as lately; however, the nepotism began early. Everybody knows who the first Post Master General was: who was the second?
Regards,
Jack
P.S. Congratulations on your pay level, and on pursuing those who delayed the mail. Now, when you say they were "fired," did you mean fired, or shuffled around?
The only people who actually get FIRED for "delay" of mail are those poor letter carriers who get caught with garages full of undelivered junk mail. Delay of a few days or so, due to incompetent management, was NEVER a cause for firing. FYI, "fired" means: no longer employed by the USPS in any capacity.
RakeRocter| 8.30.09 @ 2:34PM
JOKE (Jay Leno):
Did you hear they're going to raise the price of postage stamps again?
No.
Yeah, they plan on using the profits to buy more of those "THIS WINDOW CLOSED" signs.
evisu jeans | 8.30.09 @ 10:15PM
This is a great piece. Very thought provoking. I like the sort of ending that leaves it opn to personal input. Makes it work for just about everyone I think. Nicely done! I’ll subscribe.
WorBlux| 8.31.09 @ 10:03AM
The post office is not making a profit. It is subsidized passively to the tune of 70 billion dollars according to the governments own studies.
If the post office were to pay taxes, they would amount to 30 billion, and the monopoly on first class mail is estimated to worth approximately the same amount.
James| 8.31.09 @ 12:13PM
Jack: Fired is fired.
Again, out of fidelity to your principals, why don't you pay the union back the wages you earned above what you would have received had they not negotiaged your the terms of your 26 years of employment?
And I'd suggest you do a little research on what the AmSpec actually promotes:
"The 2008 book Turkmeniscam, by Harper's Magazine journalist Ken Silverstein, reports that American Spectator editor R. Emmett Tyrrell Jr. was paid by the Carmen Group on behalf of the Kazakhstan government to visit Kazakhstan in 2000 and write favorable articles. Tyrrell wrote such an article for The Washington Times. The funding was never publicly disclosed."
WorBlux: Name that study. Matter for the blind and congressional mail is worth $70 billion? LOL
Jack| 8.31.09 @ 9:13PM
James,
So you DO vote Democrazi, yes? I suggest you do a little research on what THEY actually promote. Hint: it ain't capitalism. Have you noticed the number of Marxists on Mr. Obama's team? How do you feel about that?
As to union extortion. Is the postal employee worth his hourly wage? If so, then he has worked for it, and is not indebted to the union. On the other hand, if his wage is inflated beyond his worth to the P.O., then the P.O. cannot survive. This is called: economics.
Is, or is not, the Postal union a shill for the Democrazi party? At the national level, the electorate is about 50/50 Republican/Democrat. Why should postal employees be 100% Democrazi? Why should employees who choose to vote Republican, join a union that supports only Democrats? In the voting booth there are more important considerations than who delivers the mail.
Sorry, what exactly was your point about AmSpec? I believe you mentioned that a professional writer got paid to write. It happens. Did he write lies? If so, what were they?
As for objectivity, who pays you?
As to "fired is fired." Sorry, but I don't believe you. In 26 years I've never seen it happen once. Except in the cases I mentioned earlier. Unless you mean fired is fired is demoted.
Regards,
Jack
Pingback| 2.15.10 @ 7:41PM
Friday Links | Think Tank West links to this page. Here’s an excerpt:
dodo | 7.12.10 @ 4:18AM
thanks for sharing