Who Will Deliver The US Postal Service From Destruction

Who will deliver the US postal service
from destruction?
The US Postal Service faces drastic closures, thanks to a bogus
financial crisis cuts that threaten America's very way of life
Philip Rubio
guardian.co.uk, Tuesday 13 December 2011 10.00 EST
US Postal Service trucks. Photograph: Scott Olson/Getty Images
The unthinkable now threatens the US Postal Service: bankruptcy. With no relief
forthcoming from Congress, the USPS hopes to save itself by planning the closing of
about 3,700 post offices next year, along with 252 mail processing centers.
Around 120,000 postal workers will lose their jobs with another 100,000 positions
going unfilled. Saturday delivery will be gone, and first-class letter delivery will be
slowed. Some historic postal buildings, including those with New Deal-era murals, have
already been sold off.
How could this venerable institution founded in 1775, which ran deficits for most of its
existence as the "US Post Office Department", face a possible shutdown?
Don't blame the internet. Online communications and transactions have cut into first-
class mail use, but have also helped generate mail volume, particularly parcels. The
internet is not the source of USPS red ink, although it provides a popular narrative for
those who have wanted to privatise the USPS for years and are using the current crisis
to push that agenda. The USPS still delivers 40% of the world's mail, and has done so
without any taxpayer subsidies for 40 years.
In fact, the USPS has consistently exceeded the mandate of the 1971 Postal
Reorganisation Act (PRA) that it continue to provide universal service and be self-
supporting in its new status as a quasi-corporate government agency. (The USPS and
PRA are products of the 1970 great postal wildcat strike against low wages.)
So how did an organisation that actually earned a $6131m revenue surplus over the last
four years which included the worst recession since the 1930s get so deep in debt,
with a $10bn deficit this past fiscal year?
The USPS is the victim of an invented crisis. The 2006 Postal Enhancement and
Accountability Act forced the postal service to unnecessarily prefund its retiree health
benefits 75 years into the future at the rate of $5.5bn a year over a ten-year span.
Picture a homeowner whose bank suddenly demands its mortgage paid in full not in 30
but in three years, with the homeowner reduced to desperate but futile measures of
selling off furniture and appliances to avoid foreclosure.
Don't blame the salaries of postal workers: their selection by high exam scores, training
and accountability, plus good wages and benefits has produced high productivity and a
low quit rate. The postal workforce has, in fact, shrunk from nearly 800,000 in 1999 to
560,000 today. Most of those job cuts had to do with increased automation, but many
have come at the price of service despite the post office's original constitutional
mandate.
The post office has historically been key to American communications and commercial
progress. The post office has also long been a job opportunity site; for African
Americans, that opportunity only began in March 1865, with the overturning of white-
only postal employment laws. For black America, postal work then became a
destination, tradition and antidote to private-sector job discrimination. Jazz giants
Charles Mingus and Herbie Hancock once worked for the US Post Office. So, too, did
comedian/activist Dick Gregory and actor Morgan Freeman. But many more were
career employees, like Frasier Robinson Jr, the paternal grandfather of First Lady
Michelle Obama. The rate of black postal employment compared to whites was two to
one by 1970.
Since the 1960s, about 21% of the postal workforce has been African American, with
black majorities in some cities. Their activism was pivotal to breaking down
discrimination and segregation in the post office and its unions, making the USPS one
of the most diverse workforces in the US today. It has been crucial to black community
development and middle-class entry, and the loss of postal jobs now has been most
devastating to blacks and veterans.
Since the American civil war, city and rural delivery of first-class letter mail, advertising
and periodicals have been major examples of post office innovation. The "new" parcel
post service in 1913 provided relief to customers previously gouged by inflated prices
and limited service by the private sector. Today, the USPS is the hub of a $1.3tn mailing
industry that employs almost 8 million workers.
Several competing bills are before Congress whose aim is to either save or essentially
scrap the USPS. The bills to save it range from removing blocks to USPS
competitiveness to allowing it to reclaim an estimated $50bn in pension funds that the
Office of Personnel Management has overcharged it during the last few decades, and
apply it to the retiree health benefit prefunding. The postal unions have joined national
and local popular protests opposing the cuts. About 30% of Americans do not access the
internet, and many rural areas also depend on their local post offices as community
centers.
The post office has always been part of a nationwide and global network that is not just
about communication, but also about creating jobs and nurturing communities. Who
will provide universal service at reasonable rates if the USPS is gone?
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WestTexan
13 December 2011 3:10PM
All banana republics have horrible postal services.
This is just one more indication of the US's decent into third-world status.
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DocMolotov
Cliff Claven your time has come.
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MichaelBulley
The US Postal Service was the victim of one of the best graffiti ever. Its motto, inscribed
on its headquarters, is "Neither snow, nor rain, nor heat, nor gloom of night stays these
couriers from the swift completion of their appointed rounds." Some wit wrote
underneath "So what is it, then?"
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dirkbruere
I would not mind betting that those making the rules have had their political campaigns
financed by those who gain if the USPS is closed down.
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Chummie
Could we see a return to the Pony Express?
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NunOfTheAbove
Yanks need to stop watching American Idol and X-Factor and start to OCCUPY if they
want a better future that is not controlled by corporate power
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Freedomfighter
Id love to see a list of free market corporations that are able and required by special
law to pre-pay 70 years of pensions in five years.
Americas elected fanatics are determined to kill off successful American institutions
for the benefit of their paymasters.
We are witnesses to a stunning piece of hypocrisy that will go down in history books as
nearly incomprehensible.
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U00010
Who will deliver the US postal service from destruction?
Revolutionaries.
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LV09
I thought it was Kevin Costner who saved it?
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Definatelynotashark
The US Postal Service faces drastic closures
I blame the Tories
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DickSpanner
Cliff Cleveland?
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DonkeyHotee
The clue is in the word "service". It implies horrible socialistic ideals and a lack of a fast
buck to be made. It's obviously out of date in the 2st century.
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meljomur
I guess its no coincidence the USA had a Republican controlled WH and Congress in
2006.
Damn it these stories really piss me off.
Beware Britain, these types of stories are in your future as well, especially with Dave and
George at the helm.
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Continentaldivide
I very rarely use the USPS. Everything is online now, bill paying, payroll, federal income
taxes, periodicals are all available online. It may simply be that the post office model is
past its time. For packages, I'd use UPS or Fedex, the service is faster. 90% of what I
receive in the mail is unwanted junk mail. Why would I want Congress to save that?
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meljomur
Response to Continentaldivide, 13 December 2011 3:57PM
Course not. Never mind that almost 250,000 people are going to lose their jobs.
Why have the government bail out a useless postal service when it can use the money to
bail out the banks.
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Continentaldivide
Response to meljomur, 13 December 2011 4:01PM
Would you organize the post office again today as a business model and go out and hire
all the folks currently working there today? no, of course not. if you would, explain why.
nice try but I am against bank bail outs as well. Got anything else?
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StephenMorrill
Might have been useful for the Guardian to tell us more openly that the author has two
axes to grind: he's a retired postal worker dependent upon a continuing retirement, and
he's author of a book on African-Americans in the USPS - which explains the odd segue
into that subject in the middle of a column about finances.
And he trots out the old, tired, 'official' line that the USPS is truly independent of the
U.S. Congress. That was never so and is not so now. Short of eliminating the USPS
entirely and letting the likes of FedEx and UPS take over mail delivery (companies with
less than half the labor costs, thanks to more sensible union contracts, by the way),
Congress has no option but to bail out the USPS - again. As it has done before.
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CaptainSwing666
This is what astounds me about the US. Any old nutcase with a grudge or an agenda can
introduce a law that shafts a going concern because they can get something out of it
without justifying the reason. Civilisation huh?
They did this recently in Moscow when they decided to ban all in city casinos. The guy
with the big out of town casino who proposed this made a killing.
The US - catching up with post Communist Russia day-by-day.
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Americafirst
The USPS works well and is constitutionally mandated. It's destruction has its genesis in
'conservative' ideology that the private sector does everything better and the public
sector is, frankly, illegitimate. Then there are other problems from the 'conservative'
point of view: postal service employees are relatively well paid. Conservatives would like
to see them on the US minimum wage of about $7 an hour, and with greatly reduced
benefits. Moreover, a race to the bottom in wage scales could be matched by rapidly
escalating rewards for those at the top of the management pyramid. Make no mistake,
the Corporate State is now considered to be entirely achievable. Indeed, it's now well on
its way. And what comes after that has been tried earlier - in the 1930s.
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oncemanc
The USPS serves every community, no matter how remote. Did you know that your
beloved UPS and Fedex don't do that, but pick and choose what pays them best - and
rely on the USPS to do the final stage of delivery to the areas that they don't serve? Be
careful what you wish for - do you really imagine that if the USPS went out of business
they wouldn't raise their rates even more?
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Phillyguy
How well was the pension funded before then?
While the Post Office is pretty good- junkmail has effectively raised its costs (they go to
every house, everyday- how expensive is that?)
Junkmail also dilutes the mission- when you throw away 15 mailers- its real easy to
throw away the one bill you need.
Don't blame the internet. Online communications and transactions have cut into first-
class mail use, but have also helped generate mail volume, particularly parcels. The
internet is not the source of USPS red ink, although it provides a popular narrative for
those who have wanted to privatise the USPS for years and are using the current crisis
to push that agenda. The USPS still delivers 40% of the world's mail, and has done so
without any taxpayer subsidies for 40 years.
Funny that this entire article doesn't mention revenues- have they dropped or not?
Hiding something?
I just bought two stamps last week- my first all year - its December.
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W1GYF
First-class mail - regular letters - has been subsidising "junk mail" for decades.
Since junk mail is a loser, just drop it. Nobody wants it anyway, and 99% of recipients
pitch it into the bin within minutes.
And that 2006 "Postal Enhancement and Accountability Act" that was a gift to the
murrikkkan people from Bush and Rove - sounds like fertilizer to me.
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CaptainSwing666
Response to StephenMorrill, 13 December 2011 4:10PM
Might have been useful for the Guardian to tell us more openly that the author has two
axes to grind: he's a retired postal worker dependent upon a continuing retirement, and
he's author of a book on African-Americans in the USPS - which explains the odd segue
into that subject in the middle of a column about finances.
What's your point?
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Enduroman
The easy way to cut the size of the USPS workforce is simply to ban unsolicited catalogs
that make up about 90% of my mail, maybe 95% if I had bothered to subscribe to e-
billing only.
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sideharding
I am constantly astonished by the lack of any discussion on a simple fact that underpins
the problems of the postal services in both the UK and the US: the universal service
obligation (USO).
If you have one business (USPS, or the Post Office) that has this obligation, and then
also allow competitors to operate without ththe USO requirement, you practically
guarantee that luctrative services will be cherry-picked by the commercial competitors.
This leaves three basic choices:
1.) Subsidize the postal services that provide universal services, in light of their social
importance.
2.) Pass law to require all courier/package delivery services to function with a USO (that
is, require FedEx, UPS etc to carry a letter anywhere in the country for a small, fixed
fee).
3.) Allow the postal services - and thus the USO - to wither and die.
Simple.
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chasbot1
typical government gravy train shill, who clamors for the cushy no-work jobs to be
continued at taxpayer expense. i only use stamps to send greeting cards, other than that
all packages go to UPS, and all bills paid online.
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Continentaldivide
Response to oncemanc, 13 December 2011 4:12PM
I've never had UPS and Fedex unable to deliver a package.
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CaptainSwing666
Response to chasbot1, 13 December 2011 4:16PM
the cushy no-work jobs
And you, of course, perform some vital task that directly impacts your nations well
being.
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Continentaldivide
Response to Enduroman, 13 December 2011 4:14PM
You can mark them "Return to sender" and put them back in the mail. the senders have
to pay the return postage.
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Continentaldivide
Response to sideharding, 13 December 2011 4:15PM
You are suggesting that a failing business model be able to force successful models to
become non competitive. What possible federal law could require a private company to
make deliveries where it doesn't want to do so? The US is not a monarchy where this can
simply be ordered.
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CaptainSwing666
The US is not a monarchy where this can simply be ordered.
But it can turn working business model into a failing one at the passing of a law. What's
that then, a dictatorship?
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NottyImp
Those subscribing to Neo-liberal ideology will destroy whatever they can in their
insatiable thirst for profits. Iti s a mental disease without equal in human history (and I
include religion in that).
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orkney93
The cost of mailing domestic letter via USPS : $ 0.44
same via Fedex : $ 7.95
US to Europe via USPS : $ 3.55
same via Fedex : $ 21.95
If you miss your certified USPS letter, go to the nearest Post Office (1-2 miles)
Miss same by Fedex - drive 30 miles.
Here's your answer. Cheap competition cannot be allowed. Ask Freddie Smith.
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CaptainSwing666
The 2006 Postal Enhancement and Accountability Act forced the postal service to
unnecessarily prefund its retiree health benefits 75 years into the future at the rate of
$5.5bn a year over a ten-year span.
So who proposed this part of the Act and how do they benefit from it?
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harryboy
meljomur
I guess its no coincidence the USA had a Republican controlled WH and Congress in
2006.
from govtrack.us
Dec 8, 2006: This bill passed in the House of Representatives by voice vote. A record of
each representatives position was not kept.
Dec 9, 2006: This bill passed in the Senate by Unanimous Consent. A record of each
senators position was not kept.
Not one Democrat in either the House or Senate voted against it
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GaCentrist
Response to chasbot1, 13 December 2011 4:16PM
Typical self concerned right wing clap trap. "I don't use it personally so it can't be any
good."
Again, did you read the article? The only reason the USPS is in debt is due to the
requirement that its pensions be funded decades in advance. Put those same
requirements on FedEx and UPS and see what happens to the rates you pay them.
The right wing solution to the unemployment problem is to make more people
unemployed. (because they are unionized, so of course, they deserve to be unemployed).
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DeltaFoxWhiskyMike
Response to Enduroman, 13 December 2011 4:14PM
The easy way to cut the size of the USPS workforce is simply to ban unsolicited catalogs
that make up about 90% of my mail, maybe 95% if I had bothered to subscribe to e-
billing only.
Yesterday I got one Christmas card, and the other eleven items were catalogues or
solicitations. Looking through them, I calculate that somebody paid about $3.50 to send
the lot to me. Adding the 45 cents for the card. the USPS grossed $3.95 stopping at my
mailbox.
The pizza place puts the cost of delivering a pizza to me at about $3.00. That is from a
few miles up the road. I suspect the total cost of bringing one Christmas card out to me
from the post office is just about the same, or would be if that was the only thing the
carrier had in his sack. The very reason it is even possible for him to bring the card is
that he has enough "junk" that somebody is paying to deliver to most or all of my
neighbors that the card can be included at little to no additional cost.
At the apartment complex nearby, the mail carrier can stand in one place and toss all of
the commercial mail into boxes for the residents, accounting for about $350.00 in
postage fees with one ten minute stop.
If you got rid of all of it in one swoop, there would be no economies of scale, no reason
to stop at every mail box, and no way for the post office to carry a letter across the
country for less than half a buck. You and your single Christmas card are not all that
important. You and your neighbors as customers for all the merchants who send you
stuff are collectively important. Eliminate all the so-called "junk mail" and from that day
on each genuine bit of first class correspondence will have a Domino's level delivery
charge per piece.
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SusScrofa
This is why the US Postal Service needs to be shut down and America's mail service
handed over to FedEx and UPS. This is exactly the type of opportunity the free market
needs to shine.
http://www.youtube.com/watch?v=cuaYc3WGZdA&feature=fvsr
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Continentaldivide
But it can turn working business model into a failing one at the passing of a law. What's
that then, a dictatorship?
"working" would be very debateable when applied to the USPS. And passing laws is not
really what dictatorships are into, you know?
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gorillainexile
i do not quite understand. in 2011 After the Social Network and the
sadly loss of Steve Jobs/Apple and the media hype about the Ipad's and Ipod's
where the mass is encouraged to go E.
You are complaining about the loss of the regular Postal Service? well Me and My Cat
"Street Fighter'
Do not give a Toss if they shut down.Coz there is no coherence on the whole Spectrum.
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CaptainSwing666
The Funding of the Postal Service Retiree Health Benefits Fund
After generating modest profits from FY2004 through FY2006, the USPS lost $5.3
billion in FY2007, $2.8 billion in FY2008, and $3.8 billion in FY2009.
Were it not for congressional action to reduce a statutorily required retiree health
benefits payment (see below), the USPS would have lost $7.8 billion in FY2009.
The USPSs financial losses resulted from declining operating revenues and significantly
increased operating costs, the latter of which was largely the effect of the PAEAs
requirement that the USPS prefund its future retirees health benefits.
Section 803 of the act established a 10-year payment schedule to greatly reduce the size
of the USPSs future retiree health benefits
obligation (Table 1).
Interesting reading
http://www.fas.org/sgp/crs/misc/R40983.pdf
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CaptainSwing666
And passing laws is not really what dictatorships are into, you know?
Tell that to Hitler, Mussolini and Stalin - all of whom passed mountains of laws to
legitimise their activities
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Continentaldivide
Response to CaptainSwing666, 13 December 2011 4:42PM
You mean they passed laws through elected legislatures? Or they simply ordered specific
things. there's a bit of a difference. that's why they were, um, dictators, becuase they uh
dictated. legislatures, uh legislate.
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Continentaldivide
Response to CaptainSwing666, 13 December 2011 4:40PM
Ah, so the postal employees union demands that the USPS prefund future retirees
health benefits while revenues are decreasing because there are so many other ways to
have information delivered, many of them FREE no less, and someone doesn't get what
happened? Oh dear
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sideharding
"You are suggesting that a failing business model be able to force successful models to
become non competitive. What possible federal law could require a private company
to make deliveries where it doesn't want to do so?"
I am not particularly advocating this for the US... I merely include it in the discussion
for completeness. It is a theoretical possibility, but I can't comment on its likely survival
of legal challenge. There are rough parallels: the regulation of companies providing
services over airwaves, for example. Providing universal service, then, could be a
condition of licensure.
The basic point I was making remains: requiring only one company to be bound to a
USO means it will be damaged by those which are not.
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jonnymars
Have you been a US Post Office lately? It's a disaster! Lines out of the door and only one
member of staff working at a rate that any private sector worker JUST COULD NOT
ACHIEVE. I do not know where they learn to work that slowly. There has to be a special
USPS "How to work slower than a snail's pace" class.
Invariably there are many other employees milling around in a back room doing
nothing that could be manning the counter. If customers could get in and out quicker,
they wouldn't be heading to UPS and FedEx in droves.
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CaptainSwing666
You mean they passed laws through elected legislatures?
Yep, ever heard of the Supreme Soviet?
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CaptainSwing666
Not the postal employees union - it was introduced by Congress - some have said as a
deliberate attack on the union.
Oh dear indeed?
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MacRandall
Response to oncemanc, 13 December 2011 4:12PM
@oncemanc
The USPS serves every community, no matter how remote. Did you know that your
beloved UPS and Fedex don't do that, but pick and choose what pays them best - and
rely on the USPS to do the final stage of delivery to the areas that they don't serve? Be
careful what you wish for - do you really imagine that if the USPS went out of business
they wouldn't raise their rates even more?
Firstly, most rural delivery of USPS mail is done by independent contractors, not the
employees covered by the pension fund discussed here.
Secondly, here is the FedEx Service map. You'll note every area of the country, including
the remotest sections of Alaska, are guaranteed service within a maximum of 7 days. Or
your money back.
And Finally, here's the kicker: FedEx Is Again USPS's Largest Supplier
Ouch. The term "ignorant blowhard" comes to mind right about now.
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nauseausa
A major scam. Profitable services privatized [Package delivery services privatized to
UPS/FedEx], revenue starvation [On each first class stamp appears the word "Forever",
meaning that revenue is fixed while inflation and fuel related costs go up], retiree's
pension prepayment requirement [diverting funds from infrastructure improvements
and services].
This is part of a bi-partisan effort to destroy this public sector institution.
The same thing is going on with the school system ["charter schools"]. Cream the top
students into private charter schools, leave the rest to fend for themselves.
This is part of a bi-partisan effor to detroy this public sector institution.
Even the Obama payroll tax holiday extension is expressly designed to destroy Social
Security. Payroll taxes reduced looks fine on paper until you understand that the
funding for the continued reduction comes from employee/ employer Social Security
contributions.
This, again, is a bi-partisan effort to destroy this public institution.
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