Rain or snow? No problem, but revenue shortfalls cripple the Postal Service
Filed under: Economy
Facing a $7 billion shortfall, the United States Postal Service (USPS) has explored numerous strategies for reducing costs. In addition to getting rid of many of its traditional blue collection boxes, it has looked into raising rates and cutting hours. The latest proposal is to close up to 700 underperforming post offices.
Given the choice between increased postage rates and post office closures, the vast majority of customers are in favor of closures. However, when it comes time to choose which ones to close, everyone wants to keep their own local post office.
Post offices, after all, are the most prominent -- and, in many communities, the only -- physical entity connecting towns to the federal government. This, incidentally, may go a long way toward explaining why many citizens are so dubious about government efficiency: after waiting in line for half an hour to face down a surly shipping clerk, it is all too easy to assume that the government is rude, poorly run, and unresponsive.
Whenever there are postal problems, the same refrain inevitably emerges. Some market capitalist -- in this case, Fortune -- pipes up with the clever suggestion that the postal service should privatize. On the surface, this makes sense: after all, UPS and Federal Express seem to be doing well, and it is a well-accepted truism that private industry is far better than the federal government at pretty much everything.
The thing is, when one compares UPS or Federal Express with the USPS, it becomes clear why a publicly funded post office is a necessity. The first issue is price: as anybody who has recently compared the U.S. Postal Service's Priority Mail shipping with UPS and FedEx can attest, the government's prices on most items are significantly lower. While this might not make a huge difference for some consumers, those of us who often ship packages vastly prefer paying less. If private shipping services didn't have to compete with the federal government, it is reasonable to expect that prices would go even higher, which would be devastating for many lower-income customers.
Additionally, for all its plodding bureaucratic incompetence, the USPS does, indeed, deliver. I've lived in many homes and, for one reason or another, UPS refused to deliver to half of them. While there have been times when I've had to go to a post office and wait in line for a package, this has been far preferable to UPS, which usually requires that I journey to a regional distribution center, which is inevitably located an hour or so from my house, to pick up my package.
While the internet and private industry have taken care of many of the USPS' services, it is worth noting that online commerce remains highly dependent upon a cheap, convenient mail system. After all, it doesn't matter how cheap a sweater is on eBay: if it costs a fortune to deliver, the potential savings evaporate. Many companies currently rely on the Post Office to keep prices low; if it was well-funded and more convenient, it seems likely that it would become even more popular.
The ultimate problem is that many consumers have yet to wrap their minds around the fact that the mail is not a business, and can't really be measured on the same yardstick as a McDonald's or a 7-11. It is a fundamental governmental service, a basic requirement for a modern, industrialized nation. Along with public schools, roads, and the military, it is something that citizens (justifiably) feel entitled to.
In this context, $7 billion is not much of a bailout, and there is little question that the USPS adds more value to the average American life than Goldman Sachs, Bank of America, or General Motors. Rather than quibble over closings and postage increases, it's time to get it together, recognize that some things are non-negotiable, and pick up the tab for the post office. While we're at it, in fact, maybe we should talk about how much it would cost to create a well-funded, efficient postal system that we can be really proud of.



























Reader Comments (Page 1 of 23)
8-05-2009 @ 12:09PM
Bob said...
A good fix to the problem is one that private industry and now California State employees have taken. Reduce the employees pay by 15% and freeze pay increases.. This way there will be no layoffs and the USPS will operate in the BLACK. Certainly, public employees should share in the belt tightening along with the rest of us.
Reply
8-04-2009 @ 2:39PM
jim said...
Bob
First comment all day that makes sense. Why is it that only public employees should be exempt from the recession.
8-04-2009 @ 3:48PM
nancy said...
We are trying to encourage employees with over 25 years service and/or with age 50 or 55 and so many years service to retire early; also, there have no pay increases for awhile.
8-04-2009 @ 4:34PM
flamingrose40 said...
The problem with that Nancy is that when the market took a dive, so did many Americans retirement plans and savings, so many CAN"T retire right now at 55 at a seriously reduced amount.
8-04-2009 @ 4:37PM
teltech54 said...
You are forgetting the major obstacle. The Union.
8-04-2009 @ 4:33PM
Lea said...
I have more than tightened my belt. When gas was at over 4 dollars a gallon, I had to fill my gas tank alittle over twice to deliver my route. Alittle over 60 a tank. My comp for that was 125.47 a week. That was for gas, tires, oil, and brake pads. Everything. It is my responsiblity to upkeep the car. Do you think that 5.47 dollars a week can do all of this? Brakes are redone every 6 weeks, oil changes monthly, tires about 4 months and that is if something doesn't puncture them and have to be replaced. I had to pay that out of my pocket. It took the post office 6 months to raise it and then, it was just 10 dollars extra a week. On the count before last, I actually had a manager to change my figures. I lost an entire day off of my route. When confronted, he simply told me that I trusted the wrong person. Since then, I have found out that for every hour a manager cuts off of a route, he is given a bonus for the hour. The more hours, the more bonus. I now have over 900 boxes. The wear and tear on my vehicle will require me to have another one in a couple of years. I know you meant, or kinda meant well, but please before you talk about employees tightening their belts, talk to one and find out exactly what your asking. Do I love my job, you bet. I spent 4 and a half years working to obtain this job. I had to sub in other words, no vacation pay, no insurance, and no gurantee of work weekly of more than one day. I EARNED this job big time. Now, let's talk managers. I have found out that a manager that lived two hours away was given a 1700.00 a month apartment to live in for 5 to 6 months. One person, two hours away, he spent weekends back at his home. That is beyond a mortgage. This is in Arkansas! Most mortgages aren't even that! There are many, many more instances of mismanagement of money by management. You would be amazed to find out exactly how the upper levels of management are making. I am sorry if I am ranting, but it really ticks me off to hear people talk about the carriers as if their the ones sucking the post office dry!
8-04-2009 @ 4:39PM
Philly Pfran said...
Nancy, I'm fifty eight and have been working thirty seven years. I wish I had enough to retire. The governments (ALL - local, state and federal) must get rid of the sweetheart "defined benefit" pension plans like all companies in the marketplace have done and get 401K plans like the rest of us.
8-04-2009 @ 4:45PM
jeanne said...
as a rural carrier with the usps i took a $5,000. pay cut in april and am paying more for my ins. what more should i contribute, also the usps is paying me less for my gas even tho the price is going up, please know all of the facts before you make blanket suggestions, rural carriers get paid on a piecework basis, also the city carriers are having their routes added to and some jobs are being eliminated, lets see if mgmt can match our,"giving" they all got their bonuses last november, hmmmmm
8-04-2009 @ 4:54PM
cajaross61 said...
Um, Bob, have you ever worked 40-50 hrs in freezing rain, snow, hail, thunder, lightning, up to 105 degree temperatures or more with the heat index, while toting a 35 lb.mail bag, evading dogs, wasps, whiny customers etc.? I HAVE. In the last 26 yrs as a postal employee, I have had approximately 9 Saturdays off per YEAR--how many have YOU had? I earn every bit of sick leave (which you do NOT get paid for if you quit or retire), annual leave and holidays that I receive for doing so. I lost over $16,000.00 of my retirement last year, along with everyone else. Why should I have my pay cut for doing the same physically demanding job? My guess is you wouldn't do this job for $51 grand a year once you knew what it was REALLY like. They take your days off at a moments' notice; cancel your leave; refuse all leave chits during prime leave (Feb-Dec) b/c 3 people in each office are on vacation at all times except for when the national or state conventions are convened. Mandatory overtime is a daily event whether you want it or not, are in pain, have a sick parent/child, are exhausted. They give you a 2 wk. suspension for getting a dog bite no matter what the circumstance. Then, they sue the dog owner and keep whatever money was received (they don't lose these cases) and the carrier never gets any of it. They can change your schedule at any time, for any reason, and you can't do ANYthing about it. Come do my job for a week--if you last a week or more, you get what they give us for 30 yrs. of service at your retirement: a paper certificate in a fake VINYL folder. Yeah, I will fight all the way to keep my job, money, benefits, vacations. You have no idea what you are talking about .
8-04-2009 @ 4:52PM
carla said...
Oh, and Bob? Mail carriers and clerks are never eligible for the giant bonuses that managers and postmasters have been receiving for years. When they cut THEIR bonuses, pay,. and benefits and give some of it to the real WORKERS, then talk to me about cutting MY pay and benefits.
8-04-2009 @ 4:50PM
stansfo said...
The biggest money problem is the current retirement plan. If the PO would use normal retirement plans of police/fire, 25 years and out, it would save a ton. It takes about 15 years to top out in the PO pay scale. So if you start at 20 years old, top out at 35, and still have to work until the mandatory 57 age to retire, that's 22 years of top pay. ( bunch of money compared to new hires ) If they would simply switch the retirement age to 25 years of service, ( without penalties ) 9 out of 10 older workers would be gone in a heartbeat. Thus lowering the workforce and grant new positions for younger more energetic workers at two thirds the pay. Their long retirement plan is messed up big time. The PO complains they can't get the workers to retire, but each year before 57 years of age they lose 2% of their pension. So it's the PO's own fault for not fixing the system. For this reason I vote NO to gov healthcare.t plan.
8-04-2009 @ 4:56PM
1bigman said...
If the PO would use normal retirement plans of police/fire, 25 years and out, it would save a ton. It takes about 15 years to top out in the PO pay scale. So if you start at 20 years old, top out at 35, and still have to work until the mandatory 57 age to retire, that's 22 years of top pay. ( bunch of money compared to new hires ) If they would simply switch the retirement age to 25 years of service, ( without penalties ) 9 out of 10 older workers would be gone in a heartbeat. Thus lowering the workforce and grant new positions for younger more energetic workers at two thirds the pay. Their long retirement plan is messed up big time. The PO complains they can't get the workers to retire, but each year before 57 years of age they lose 2% of their pension. So it's the PO's own fault for not fixing the system. For this reason I vote NO to gov healthcare.
8-04-2009 @ 7:55PM
anthony said...
FYI - We pay into our health plan , mine went from $40 every 2 weeks to $180 . $0 COLA for the past year too.
8-04-2009 @ 8:52PM
The realist said...
I agree with you. And, personally I would say eliminate Saturday delivery and make "creditors" conform to the postmark, that Monday is the "grace day". That is the way it used to be.
8-04-2009 @ 11:26PM
bailoutsos said...
Some of you poster actually think that long, intelligent postings will make a difference. They don't, so keep it short.
8-04-2009 @ 11:30PM
bailoutsos said...
Some of you poster actually think that long, intelligent postings will make a difference. They don't, so keep it short.
8-05-2009 @ 10:01AM
Mike said...
What the Post Office needs to do is stop giving its supervisors bonuses.Why should they get money for something the employees are doing.We're the ones getting the extra business,not them.All they do is hound us to hit our MSP's and other bull crap.When I first started carrying it was all for the customer ,now its just get out on time and back on time,dont worry about checking for change of addresses. Ask the Postmaster how much of a bonus he gets and all his little cronies.
Believe me carriers dont get any extra,and havent received a raise or cola increase in awhile.
8-05-2009 @ 11:41AM
Get rid of the old ones! said...
Do you realize the Postal Service has no mandatory retirement age? There are thousands of 75 PLUS year old employees barely shuffling along at the mail processing centers across America, taking jobs younger people with children to support should have. These geriatric employees cannot perform the job any more, and the younger employees must pick up the slack for them. For every one geriatric employee, they can afford to replace them with THREE new employees, as they are no longer hired under Civil Service.
8-05-2009 @ 12:16PM
mailguy2723 said...
Before you start coming down hard on the craft workers carriers, clerks and such look at management. I recently retired after 34 yrs as a carrier. We now deliver 3X's the amount of mail to 20% more stops per route then when i started. Our carrier craft has been reduced by 15%. In the clerk craft with automation their reduction is closer to 40% while this should have resulted in savings to the USPS it created workloads that couldn't be met. 15 yrs ago you could expect at peak times a 10 to 15 minute wait in line at the window to be served at your local branch. Now postal mgmt installs automated machines in their lobbies, cut their people that serve you, now you wait 1/2 to 1 hr and if you complain they state use the machine. Carriers in our station used to start at 6:30 for a business route 7 am for residential routes and most businesses received their mail by noon. Most mail was delivered by 3:30 or 4:30 during vacation time. Now we start at 8AM some businesses don't receieve their mail till after 2 pm and rely on what they get in the mail that day, most businesses close at 4 or 5 pm so it leaves little time to conduct their business. Complain and you are told pay $100 a yr extra and rent a post office box and you can pick up your mail at 10 am some service huh. after cutting 20 to 30% of the craft employees, disregarding service,the number of management personel has increased in our station we had just over 100 craft workers and 6 supervisors seems to me if they cut workers they should cut managers too would save a lot of waste
8-04-2009 @ 2:24PM
kisha said...
it wouldnt matter cause when the hackers hack theyll end up getten my money that was payin one of my bills....so whateva u do online is more dangerous then puttin it in the mail...but then itll realltbe harder for the elders to put there mail in the mail box for someone to get it......what a shame..
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