I am a rural carrier with the Mesquite Post Office. I started in 1996. When I started there were over 850,000 employees. Today there are just over 574,000. The Postal Service has been downsizing for the past decade. This has been achieved through attrition and early retirements, not by lay offs. I love my job and I am proud to work for the United States Postal Service (USPS).
You can hardly go a week with out hearing about the dire predicament the USPS faces. Declining mail, mountains of debt and an ever-growing threat of a digital future have dominated the headlines for the past couple of years. The USPS is now looking at eliminating Saturday delivery and with it will go 90,000 jobs. They are also looking at closing thousands of post offices and hundreds of processing plants and with that will go hundreds of thousands of jobs. Not to mention that customers will no longer have easy access to mailing and shipping services. Plus, with the closing of processing plants, mail service will truly be at a snail’s pace. Many believe this is necessary and many believe that they should have done this many years ago. But there is more to this story that seems to get lost in the news and in the many op-ed’s.
First, the previous Postal Department and the current USPS were designed to be a non-profit public service for society. Somewhere along the way, this has been lost and some are pushing the USPS to be “profitable.” All other government agencies, except the USPS, rely on tax dollars for their operations and all operate as non-profits. In 1971, the Postal Department was reformed and became the United States Postal Service. Since then, they have been self-reliant and the price of stamps pays for the operation, wages, benefits and services that USPS offers.
In 2006, the mailing industry was an $8 billion per year industry employing over 8 million people and almost 9% of GDP. In 2006, the USPS had record volumes of mail. Yes, 2006 was a banner year for the USPS in the midst of the Internet age. The record declines we have seen started in 2007-2008 at the onset of the recession. The last time the USPS saw declines that steep was during the great depression. However, in the past those volumes rebounded without any problem. With online bill pay, those volumes are indeed unlikely to return (nor are the tens of thousands of jobs that have been eliminated at those companies that customers used to send a check to).
Something else happened in 2006 that hardly ever gets talked about. Congress passed the Postal Accountability and Enhancement Act (PAEA). This was supposed to modernize
In many ways it did, they can now offer reduced pricing on postage to large customers as in “sales”. They have the ability to be more flexible in their pricing but are forbidden from raising prices above inflation. It also returned about $48 billion back to the coffers. The Postal Service had been saddled with paying retirement benefits for military agencies. For example, if you worked for the military for 15 years then the post office for 15 years, you would have 30 years of service for retirement. The military should pay 50% and the USPS 50% right? Well the USPS had been paying 100% and this bill corrected that. However, the money was put into an account and they were told they could not use they money. It would be there for future use. So, they have billions of dollars on hand but can’t spend any of it to help in their financial crisis.
The real problem lies in the bill’s requirement that they pre-pay future retiree health benefits. The bill requires them to fully fund a 75-year liability in 10 years time. This has added around $5.5 billion annually to cost of operating the USPS. No other government agency or private sector is “required by law” to do this.
Only a handful of private companies had been doing any pre-funding and they have all scaled back or quit since the start of the recession. The USPS said they have lost $20 billion in the last 4 years. They have paid over $20 billion for the pre-funding obligation. To add insult to injury, in order to pay this, they have borrowed from the general treasury (tax payers dollars) in the form of a loan. How crazy is this! They have $48 billion on hand that they are forbidden from using so they get a loan from taxpayers to pre-pay for benefits 75 years out. Crazy!
The law passed in 2006 is forcing the USPS into bankruptcy, forcing the USPS to close thousands of post offices, hundreds of processing plants and eliminate delivery service on Saturday. The USPS will still need to make changes and continue to downsize but it does not have to be at the cost of layoffs and service to our customers.
Congress has been pushing the can down the road and has not acted to reverse this tragedy. The Senate recently passed S.1789. However, the House of Representatives have yet to act. Time will tell if we lose this still vital public service. Congress created this mess and they can fix it if they so choose and citizens who depend upon the USPS should be pushing for the right solution to this mess.
Rural Carrier USPS