Last call
for Saturday mail, folks.
The
financially struggling U.S. Postal Service says it plans to stop
delivering mail on Saturdays, but continue delivering packages six days a
week.
In an announcement scheduled for later Wednesday, the
service is expected to say the cut, beginning in August, would mean a
cost saving of about $2 billion annually.
The move accentuates one
of the agency's strong points — package delivery has increased by 14
percent since 2010. The delivery of letters and other mail has declined
with the increasing use of email and other Internet use.
Let's recall why the USPS is struggling:
because Republicans in Congress forced the agency to pay their retiree helth care costs decades down the road up front in 2006,
then refused to give them the money to do that. As a result, the USPS
made massive workforce cuts and forced thousands into early retirement,
which of course means the USPS has to pay those health care benefits up
front, putting them into a death spiral.
The
financial woes of the U.S. Postal System have become a point of
contention on Capitol Hill. The Postal Service is supposed to make a
$5.5 billion payment to its retiree health care fund by November 18th...
but doesn't have the money.
US Postal Service workers have a
retiree health care benefit in addition to their pension. Before
Congress passed the Postal Accountability and Enhancement Act of 2006,
the USPS operated under a pay-as-you-go model for retiree health care
funding. The new law requires the Postal Service to pre-fund its benefit
obligations.
"The idea is that enough money is saved over the
course of a career that the benefit is fully paid for by the time the
worker retires.
Thanks to these prefunding payments, the Postal
Service has greatly reduced its unfunded obligations for retiree health
benefits. At the end of fiscal year 2010, these obligations were under
$49 billion – a substantial sum, but much more manageable. If the Postal
Service continues making its prefunding payments, its unfunded
obligations for retiree health benefits will be around $33 billion by
the end of the decade. And the postal service will be on course to pay
these benefits over time," a Congressional insider explained.
Sure,
unless you force early retirement so that the benefit is paid for well ahead of time, thus leaving the USPS unable to pay for anything else. Like, you know,
operating costs.
It's like the government came to you and said "OK, you're 25 years old,
but you have to pay for every dime of your Medicare that we project you
will use
for the next ten years, rather than over the next 40
years. We'll be docking half of your paycheck until you get to that
number. Good luck paying your rent or feeding your kids."
Also, let's remember who lost the roughly 160,000 jobs since the PAEA was passed:
middle-class civil service workers, a disproportionate amount of them African-American.
African-Americans
make up about 20 percent of U.S. Postal Service workers - and are the
majority in some urban centers, representing 75 percent to 80 percent of
the 5,000 letter carriers in the Chicago area, according to Mack
Julion, president of the Chicago branch of the National Association of
Letter Carriers.
But the public sector has cut nearly 600,000
jobs since 2009, due to shrinking government budgets and a range of
other issues, according to the Bureau of Labor Relations. The slower
recovery for African-Americans in the labor market has, in part, been
the result of government layoffs after the end of the recession was
declared, according to the DOL report. In December, the black
unemployment rate was 14 percent, roughly double that of whites.
While
some other sectors of the economy are seeing recovery, the biggest
problems may be just beginning for the Post Office, the nation's
second-largest civilian employer after Wal-Mart with about 536,000
career workers.
Death spiral accomplished, right?
There's a reason why the Postal Service was targeted folks, it was a
source of tens of thousands of middle-class jobs, especially for
minorities. Since We Can't Have Nice Things, the PAEA was passed and
BLAMMO, a recession coupled with structural failure in the Postal
Service all but guaranteed a massive loss of jobs. And the USPS
still has another 4 years to go to pay off the $22 billion or so it has left to pay off, thanks to Dubya. On top of all this,
there are plenty of folks who keep saying the only way to save the USPS is to privatize the mail system completely.
In
the case of the Postal Service, though, privatization has become the
best path forward, mainly because it would take Congress out of the
picture. As New York Times columnist Joe Nocera
recently argued, “the problem is that neither the management nor the
workers really control the Postal Service. Even though the post office
has been self-financed since the 1980s, it remains shackled by Congress,
which simply can’t bring itself to allow the service to make its own
decisions.” And Congress won’t do so, as long as the post office remains
part of the government.
The Postal Service has many assets that
could be managed more efficiently, if Congress got out of the way. In
addition to its 32,000 post offices, it has 461 processing facilities,
monopoly access to residential mailboxes and an overfunded pension
plan. These assets would attract bidders. Consider, for example, that
many processing facilities and post offices sit on valuable real estate,
and it may be smarter to sell many of them than to keep them.
Which
awful glibertarian scold said that? You get points for coming up with
none other than former Obama OMB head and current Citigroup exec
Peter Orszag
before clicking on the above link. Saving the USPS is not something
that's apparently very high priority for the current administration
either, and this is one of the times I disagree with them on economic
policy. These are jobs that aren't going to be coming back, either,
especially here in Cincy.
So
yeah, part of me feels like going postal on just about everybody in
DC. This was one of those "self-inflicted wounds" to the economy that
President Obama was talking about yesterday, and not a hell of a lot
happened to try to fix it. Ironically,
it's postal service in rural areas
that will be cut back the most because of these changes, but this was a
needless anchor thrown around the neck of the USPS, and nobody in DC
threw them a lifeline when the opportunity was there. Postal jobs
aren't sexy.
See ya, Saturday mail. It was cool while it lasted.