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Because we don’t have enough economic troubles right now, the US Postal Service announced that they may cut 120,000 jobs and pull completely out of the federal health care plan, in an effort to cover a budget shortfall.
The layoffs would be achieved in part by breaking labor agreements, a proposal that drew swift fire from postal unions. The plan would require congressional approval but, if successful, could be precedent-setting, with possible ripple effects throughout government. It would also deliver a major blow to the nation’s labor movement.
In a notice informing employees of its proposals — with the headline “Financial crisis calls for significant actions” — the Postal Service said, “We will be insolvent next month due to significant declines in mail volume and retiree health benefit pre-funding costs imposed by Congress.”
During the past four years, the service lost $20 billion, including $8.5 billion in fiscal 2010. Over that period, mail volume dropped by 20 percent.
Apparently, the postal service often makes dire predictions like this before contract negotiations. I doubt that 120,000 postal employees will be laid off in one shot. However, there’s at least a couple things to take seriously here. First, the decline in mail volume is real. Practically every company with a monthly bill encourages their customers to pay automatically or online. That significantly reduces mail output. The move of Netflix to streaming from mail service is probably a big blow. The rise of email over personal letters is another factor. The postal service has become a way to get Amazon orders out and to get birthday cards with $10 wedged in them from grandparents to grandchildren. It has become a less crucial communications factor in American life. And because the postal service operates under a mandate to serve every home in America, even ones in the most rural outposts, which simply cannot be reached without a federal subsidy, their budget is more and more difficult to reach.
Incidentally, the postal workforce has already reduced by 212,000 over the past 10 years. So this is more of a long-term trend than a sudden crisis. But it turns out that the biggest challenge for the postal service is a technical anomaly that requires it to pre-fund retiree health and pension benefits 75 years in the future. No other agency of the federal government has this requirement, and it represents the bulk of their budget problems. Unlike practically any company in America, their pension fund is overfunded by $75 billion, walled off in an account that cannot be touched for operations.
The Postal Service wants this requirement to be changed. And that would solve almost the entire problem. But I suspect that the ripping up of collective bargaining requirements that restrict mass layoffs will be the more attractive option for House Republicans. How cutting 120,000 jobs would make sense in this current labor environment is unfathomable.
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The postal service is overstaffed considering the volume of mail process. And that volume is dropping.
The only thing i receive via snailmail anymore are:
1) Bills.
2) Magazine subscriptions.
3) Advertising.
I still pay some bills via snailmail, but I’ll stop as soon as the surcharge is less than the price of a stamp. Other than that, I mail nothing.
Reality is that snail mail is damn near obsolete. And we’ll live to see it as dead as the telegram.
Boxturtle (Advertising is more than half of my mail. And I don’t want it)
In my one and only micro course, the professor (foreign national) when talking about markets finding solutions to issues, was asked by a (young) student, why does the post office still exist? He was stumped, and I supplied the answer that it’s in the constitution.
When it was inserted, one function was to support a free press by facilitating distribution of newspapers. Well, that’s dead. But it shows why those keeping a watchful eye on control of/attacks on freedom in cybersphere are so critical.
I’m a little torn here. First of all, I think that union contracts that prevent cutting unnecessary jobs are bad, for taxpayers, mail rate payers, and for unions because it perpetuates the image of unions as havens for lazy, featherbedding workers. So that’s gotta go. Contractual regulations have to match reality. But that doesn’t mean that postal workers need to give up collective bargaining rights, have fair compensation and working conditions, pensions, and health care.
Second, on the over-funding of pension obligations: How did that legislation come about? What was the cause? Was it fear that the semi-privatized PO would not be able to fund future pensions down the road? I’d love to see this modified, but not at the risk of putting retiree benefits at risk. So what’s the compromise? What mechanism prevents that pension money from being raided, just as Zero and the Catfood Kids want to raid SS?
This will continue to the point of collapse or riots. No one with sufficient power in government or even in the culture has any will to do or advocate for anything other than Herbert Hoover contraction. As the Fed said. No change for at least 2 years. I say longer. We are out of ignorance and chicanery destroying the economy and the culture of the nation.
arGH!@#$%^&*()_!@#$%^&*()_+ DAMNIT TO HELL
does everything have to make a profit
do all those wars and 700 dollar screw drivers at the Pentgon make money?
or do 400 families of the Fortune 400 squeeze money every which way outa this country?
Bingo! I agree with BeachPopulist, above, that the Unions all need to be a bit more flexible these days, but I really don’t want collective bargaining rights torn up.
Well, it’s unfortunate, but that said, my personal anecdotal observation is that the PO is pretty much over-staffed, and on top of it, so many of the workers have the worst attitude in the world. I find it pretty unfathomable in this day & age. Almost none of the ones I interact with appear to have any notion of “customer service.”
I hear complaints from other customers almost every time I go to the PO (probably more than most do) due to nasty, rude attitudes and a seeming unwillingness to provide services. Weird.
I do think that the nature and the way we do the whole mail services business is rapidly changing, and the PO does seem a bit outdated, even though there have been a number of initiatives to offer better/different services and keep up with the times.
I hate to see jobs lost, but OTOH, if the PO is really not handling as much mail & work as before, I cannot endorse sustaining the jobs just for the sake of it.
This is why we need some kind of Public Works Commission bc there ARE other types of jobs that need to be done. It would be “nice” (won’t hold my breath) if the money intended to be spent on PO jobs chould be shifted to other public sector jobs and not just wasted on WAR, Inc.
I’ll hold that happy thought since it’s TGIF.
House Republicans? Pelosi and the Vichycrats would bleat once or twice and then support tearing up the labor contracts. It’s the serious, bipartisan thing to do.
EDIT: I think the House Republicans would be all too eager to strangle the postal service. Here comes the Fed-Ex, UPS, etc lobby money….
Already >95% of the mail I get by mass is unsolicited junk mail crap. The excuse for allowing this vast environmental mailocalypse to continue is that the ad proceeds pay for the USPS.
I guess they don’t pay enough. The USG needs to fund a mail service that works. One of the big complaints in banana republics is that the mail service is corrupt and completely unreliable. We’re on our way there.
Fine. People can rail against the Post Office as much as they like, and House Republicans can go for the jugular.
But the Post Office has some unique issues; for one, they’re mandated by law to deliver their routes 6 days per week, and that includes unprofitable routes, like rural customers.
FedEx and UPS have sucked up a bunch of that cream business, and USPS is left with the crumbs. So those deep Red Republican districts? Screw you and your mail and shoot yourselves in the foot as your rates will go commercial and higher and higher, way beyond the price of the stamp you bitch about now.
Remove that 75 year in advance problem from the USPS’s bailiwick and you realize there’s a hell of a lot of value there. Just saying…
To go along with our wealth gap, poisoned environment, poverty, lack of a national health care system and etc. All based on the banana republic model.
And another thing -the USPS is not ancient and creaky as an organization as a lot of people think. It’s highly nimble and innovative with logistics.
Point of fact being that the former CEO of USPS, Bill Henderson, helped make Netflix what it is. More, just saying…
I don’t understand why the USPS has to make money, or operate like a business. It’s a government service, and, in my opinion, should receive government funding, period.
Does the Constitution specify that the postal service has to make money? I don’t think so.
USPS workers rude? I have yet to run into a rude postal worker. A lot friendlier and more helpful than the people I’ve dealt with at corporate call centers.
Just my thoughts.
Namaste,
Antoine
How cutting 120,000 jobs would make sense in this current labor environment is unfathomable.
It increases the size of the reserve army of the unemployed, driving wages lower, thanks to the simple economic law of price and supply. It also increases employer power, meaning you have to take your boss’s shit because another job is even that much harder to find.
Those fighting the (top-down) class war find it entirely fathomable.
In all of my life, most of it using the USPS, they have only lost two bits of mail that I’m aware of. I can’t say the same for the private alternatives. The USPS is so close to 100% that the difference is insignificant while the other two big ones are batting about 90 – 95% I’d say and the volume over my lifetime has been enormously weighted in favor of the USPS. For the price, they are unrivaled in reliability and service. Though not as generous in classification between what is mail and what is freight as the private options, it has almost always suited my needs.
Copy that.
Just repeating…I recently had to return something that had come to me by USPS…when I took it to the local pac-mail for a return send, the cost was 3xs + as much…when I complained, the clerk said, yes it is more here…you can go to the post office. Way more…..
Question I’ve posed elsewhere: USPS aside, anybody have an estimate of how many “private sector” jobs in the U.S. are the result of government spending? Just the direct result (ignoring any multiplier)? And, added to my estimate of 22 – 24 million or so federal, state, and local employees and active military.
My own household example; I work for a private not-for-profit Medicare contractor. About 95% of our funding is federal. We employ about 120 people. My wife is Director of Quality for a privately held for-profit construction and environmental remediation company. They employ several hundred directly and have dozens of subcontractors. While they do commercial sector work, the vast majority of their revenue comes from federal contracts: DoD, DOE, EPA, TSA, Corps of Engineers, etc (along with various state contracts).
So, two people who directly know perhaps at least 500 or so whose livings are provided by public money.
The point? Every job lost represents another x dollars in taxes not coming back in. So, lessee… no new taxes under any circumstances, while cutting the hell out of federal spending?
We are so fucked.
I agree with Antoine, the Post Office provides a low-cost alternative to send things and shouldn’t necessarily have to make a profit. A lot of small ebay businesses depend on low cost shipping like media rate. I receive or send at least one LP a week through the USPS. But if the shipping is too expensive it makes the commerce undesirable.
That said, if the Post Office needs to raise revenue how about premium postage rates for unsolicited junk mail? This is a tremendous waste of paper resources and everyone I know hates it and throws it right away or recycles it. Either the amount of junk mail will go way down (a good thing) or USPS revenues will go way up (a good thing). Win-win!
I hear ya bro/sis. Our priorities and vision are fucked as we continue to spiral down the rat hole!
This is just the beginning. Library hours were cut to save money, teachers are being laid off to save money, the local social security offices announced today they would be paring back hours to save money. It’s the dismantling of society as we know it; on the road to privatizing every damn thing, a little at a time.
Many rural areas do not have high speed internet service. I am one of them and can sit here and visibly age while waiting. I like my postal service and enjoy receiving the occasional, “I’m thinking of you” card. I want them to “leave their damn government hands off my” postal service.
The phrase “going postal” echoes through my mind. Is the US “going postal”?
Gone.
The joys of privatization. A government service is not acceptable you can petition your Congressman. Private business says “take a hike.”
But the real deal with this is more of the move to gut the unions.
Maybe it is just nostalgia but I would hate to see the USPS go. It was one of the first and considered most vital cabinet departments. Now it is not that and seems doomed to non-existence.. Of course at the founding our government considered communication vital. Now we have governments shutting down cell phone social media networks because they are afraid of the people talking to each other.
“The point? Every job lost represents another x dollars in taxes not coming back in. So, lessee… no new taxes under any circumstances, while cutting the hell out of federal spending?”
___
I think I failed to fully explicate my point. Which is:
1. Cut taxes,
2. Cut spending (and the tax-generating jobs they represent), and
3. The Deficit somehow magically declines nonetheless.
Right.
You must have a crappy post office. My little burgs’ postal workers rock. Our mail lady is real nice and the folks at the actual office in the town next are friendly and helpful when we need to send something certified mail. We don’t need to use the office itself very often though. Frankly, I still get all my bills by mail. I trust verizon, comcast, etc, etc as far as I can throw them so I like getting my monthly bill.
In the 1980s the corporations used “going bankrupt” to rid themselves of unions and rules to do with pensions. They stole a lot of America’s pension money. The USPS cannot be allowed to do anything like that and must simply charge more appropriate rates of the junk mailers.
The union contracts already provide for some latitude in cutting jobs. The postal unions acceded a long time ago to a certain category of worker that, for the carriers, take, I believe, six years of employment to be immune from layoff. One crucial thing to remember, the carrier union’s contract is coming up for renegotiations. Management has brought out some doomsday scenario or other prior to previous carrier contract negotiations. Now that they can grab the attention of a big percentage of the population, and be in step with all our politicians with an all in move to kill another union, and reap a privatizing bonanza for the likes of UPS, Fedex, as mentioned above, well, it will be bombs away.
About the billions set-aside annually for health care benefits, it was a nice Republican made hobble for an already limping horse.
Who wants to be forced to live like a “slum dog” with a snowball’s chance in the hot Indian or Somalian sun of becoming a millionaire?
PSA: Regulation Vacation Celebration!
Well, actually, they do make money. A shitload of fucking money. Just not for the Pentagon.
And this is happening under a Democratic president. (very sad)
Stop Sat. delivery and double the cost of junk mail. There, problem solved.
The USPS was not created to make a profit but to provide a service. When RFD was introduced it was not intended to profit but to serve the nation.
And now with all the NAFTA free trade the jobs that produced goods with value(the tax base)to pay for all you listed is gone.For what?Low Wages,Child Labor,Wall Street Investments.The people of the USA want to keep all,that the products with real value,that we produced in the industeral age afforded us to have.NAFTA free trade took the foundation away now the building of the USA are falling.
Your statement was a paradox. Yes, private business has to make a profit to pay the light bill. We have to work to pay our light bill. Do we need to spend billions on an unjustified war? No. Do companies on the NYSE, unions, the boards of these companies, need to quit having a pissing contest, with our elected officials holding “it” for them? Yes. It, in my opinion is a plan. Divided we fall. They will all tell you, I know what is best for you. Washington is the culprit and purveyor, not Obama specifically, but the people we sent to Washington to look after our best interests.
The joys…I did mangage to tell her I know I can go to the PO….I must look really dumb, I guess.
At one point, suggestions had been made to have the Post Office offer banking servicse to people in low income areas, which are often ignored by banksters. Actually, the Post Offices used offer simple banking services, iirc.
For its revenue, the USPS is the 99th largest company in the world, larger than Apple, Microsoft, Pepsico, et al.
It’s not a dot gov kind of agency, it’s a dot com kind (USPS.com), FWIW, so to say.
All those advertising fliers are also being delivered at a serious loss. Bulk-rate is the cheapest one available, and it’s something like 8 cents an ounce. If they charged anything like delivery costs for that stuff, they’d have more money and could maybe lower rates for the rest of the mail.
Talk to one of the people working as a carrier. They’ll explain to you that the problems are in management, because carriers are working long days (and still doing it on foot, in a lot of places).
They raised mail rates on lower-circulation magazines and newspapers, a few years back, or tried to; the big-circulation ones could afford the lower prices they get.
I don’t trust corps enough to pay bills on line, but I do read magazines online (I pay some of them for paper, too).
Agreed.
I will bet if you look at postal rates there is a big subsidy for business bulk mail. This should be raised to cover the actual cost.
The post office here in Sacramento is always busy. Looks like they need more help, not less.
I am a retired Postal Worker. The idea at the inception of the USPS in 1971 was to destroy it. Nixon was furious when binding arbitration ended the nation’s only Postal strike by DOUBLING salaries, and affixing a COLA to the contract. Since then the “Board of Governors”, appointed by the President, has been used by Rep. Admins. to hamstring the USPS.
One “Gov” redesigned the Parcel Post system, then joined the board of UPS.
Another rearranged Airmail and Air Freight, then moved to FedEx.
The present tempest is caused because Congress, in its infinite wisdom, is requiring the USPS to fund its pensions and health care for the next SEVENTY FIVE YEARS.
The USPS wants to eliminate Saturday delivery. That would eliminate on in six carriers. Not quite 20%. But, if they start yelling 20%, they believe you will be happy when they ONLY take away Saturday delivery.
BTW, the USPS MADE $440Billion this year, before having the 75 year “insurance” charged to their account.
Undercut the post office, you undercut large, very large number of small retails from ebay stores to outlets with their own websites. They rely on the lower costs of post office deliverys to survive. This is not just about the laid off workers but an entire system of small business that depends on it.
Also, if you ever run into a right wing ahole who says the post office is not efficient or cost effective, have them price a one pound package from your city to the center of Manhattan (not Hooterville, but where the commerical carries have a large prescense). Very easy to get a quote onlien from all carriers.
I agree! Times 2.
But I think that junk mail should be just raised to “whatever the traffic will bear.” That means more revenue and at least a bit less of the crap. I already have TWO Chase credit cards I don’t use and probably get (between my wife and me) between 5 and 10 chase card offers a week. Dog help us if Chase finds out we have a toddler. They’ll be trying to sign him up too.
I just ordered a couple of dozen different items from different sellers off the internet. Got great prices and free shipping. I coulda paid a lot extra and gotten the items faster, but there was nothing life or death about getting them right away. And I just got an item from over a thousand miles away – shipped media mail on Monday, arrived Wednesday. I can track it if I want to, but why bother? It gets here. It’s not always that fast, but usually – and I suspect that some of the sellers aren’t that prompt about shipping.
Frankly, that is worth a government subsidy. I am sure it generates a lot of business/jobs – a lot of it from truly small time entrepreneurs by way of megacorps like Amazon and Ebay. I never had to turn on my car key and none of these items are things I would have ever bought even in big city Houston. So it was a small boost to the economy (times millions of purchases made by others) that didn’t have to ever happen at all. And cheap/free shipping was a large part of it.
I often tell ‘em at the PO that I am still waiting for that lousy service I keep hearing about. Of course, I avoid the place between 11 am and 1, when everybody else in the city is standing in line. Cut personnel and those waits – long because you are on your lunch and in a hurry – will just get longer. Scheduling can only do so much to ensure maximum personnel at the windows for two hours – unless you want people sitting around six hours a day.
In case you’re wondering, I don’t work for the PO and don’t know anyone who does. But I know a bargain when I see one.
Post office provide Best and Cheapest way to deliver the packages. We will not see end of snail mail as long as commerce is running in the world. Now-a-days whenever I go to post-office instead of individual mailers I always see the long lines of small business owners shipping tons of boxes.
Public Postal Service are a crucial part of keeping the shipping prices of two duopoly within a reasonable margin.
Does this mean in-directly shut-down existing small businesses which are some how scraping by shrinking postal service with unrealistic requirements and/or forcing them to raise their service prices.
All this looks like they way congress tried to curtail public popular credit unions before in favor of banks. Looks like we are again seeing $35K a plate dinner ideas at work.
yep
I dont really get the “we dont need mail anymore” sentiments im seeing on here…must be the fairly narrow FDL demographic betraying itself. All i can say is you really need to think of what it would be like without the postal service we enjoy today. not only would the destruction of it shove the U.S. further into disgraceful bannana republic status, even ‘bannana republics’ deliver the mail, you really should think about how much it would cost for you to get the divorce papers, or the birth certificate, (or the social security check) mail deliverd from califonia to New York, by UPS if there were no post office. The PO does it in 3 days for $1.75 americans just dont think things through.
I am exactly saying that snail mail will never end as long as commerce is happening in the world which does as long as human activity is present. Type of mail shifted from letters to packages due to technology where the e-commerce took hold and small businesses sprung up around it. There is no way packages can be sent by e-mail. Americans do think through. Last time when I had to FEDEX a package because of the recipient requirement the lady who came before me who was there once knowing the rates told she was going to USPS and walked away. Whenever I go to USPS I always see long lines shipping packages etc. USPS is thriving same as before.
All this congress new requirements on USPS I think is due to some brilliant suggestions coming after the end of $35K a plate dinners for campaign funds to favor the Private Duopoly competitors.
I think in my area we are seeing the future of the USPS. All the carriers are contract labor that provide their own insurance, vehicles and gas. There is one main PO, and two contract-for-fee branches.
I have never felt comfortable with concept of piece work like FedEx and our local USPS. I used UPS whenever possible.
I say cut home delivery to like 2 days a week.
I literally keep a small trash can on the porch. The “mail” usually goes directly from the box to the trash. I get maybe 1 item a week that is something I open. Everything else is just credit card offers or retail flyers for stores i never even use. I havent gotten paperbills in like 10 years. All money type things are direct deposited.
I honestly couldnt tell you how much a stamp costs. I really have no idea.
Well, I wish I had reason to care about this but I really don’t. I don’t remember Postal Unions advocating for the Public Option, or proclaiming against corporate personhood, or any other socially progressive issues for that mattter. I live in a rural area so most of my contact with the postal service has been positive but in the larger cities its another story. Plus, being an emiserata (as Jeff Roby calls us) i long ago decided that things have to get much worse for large numbers of people – and happen quickly – for there to be any chance that things will change in this country. Govt workers are not entitled to be exempt from the pain that so many are suffering. Come on in to the suffer pit mr. postal worker. Let’s hear YOUR fresh ideas for social resistance..