Killing the Unionized Post Office: Post Office Ends Saturday Mail Deliveries

          The U.S. Postal Service (USPS) has long been a favorite target of conservatives. Their primary complaints about the organization generally revolve around the fact that the employees are unionized, make a living wage and enjoy actual benefits such as retirement and healthcare. Today, the USPS announced that beginning in August of this year, Saturday residential mail delivery will end. Will this have any effect at all on the economy? It is unlikely that this will be the last service reduction implemented by the USPS. Has the economic impact of reduced services been considered by the conservatives? It would seem not. An irrational hatred of unions and the long term goal of union busting are behind the conservative’s goal of killing the USPS. Their hatred of unions blinds them to the fact that the USPS is a vital part of the American economy.

          The central question that needs to be asked is this: Does the USPS play a necessary role in the nation’s economy? Too many people focus only on the expense vs. profit aspect of the USPS. In my opinion, that is the wrong way to look at the role of the USPS. Does the expense of operating the USPS result in economic growth? Simply looking at the agency’s profits and losses does not give an accurate picture of either the ‘costs’ of the agency, or its contribution to the nation’s economy. One must consider the amount of business that is facilitated by the operations of the USPS. Looking at the data it is apparent that the USPS does play an essential role in the nation’s economy. The USPS is the most efficient postal service in the world. In 2011, they delivered mail to more than 151 million distinct addresses. Every single day they handle more than 500 million pieces of mail. They are an essential component of the American economy.

          If conservatives were truly concerned with running the USPS like a ‘for profit’ business, they would be focused on more than the cost of labor. No conservative is advocating that rural customers pay more for their mail delivery than urban customers. If one is only going to focus on cost then a multi-tiered pricing system would need to be implemented that would result in charging rural customers more than those in urban settings. The cost of delivery service for a rural user is substantially higher than the cost for urban users. However, in America, a customer living in a remote Alaskan town pays the same cost as someone who lives in Chicago. I will take the conservative wailing about the USPS’ runaway labor costs much more seriously when they propose that rural America pay more for their mail delivery.

          Ask your friends and relatives if the post office is funded by their taxes. Odds are that most will answer with an emphatic yes. The truth is a little more complicated. The ‘modern’ Postal System was born in 1970. On August 12, 1970, President Nixon signed the Postal Reorganization Act which ended the Post Office Department and created the United States Postal Service. The Act was primarily focused on labor issues; however, its most important aspect was that it mandated that the USPS be a self-sustaining entity. As a result of this mandate, the USPS funds their operating costs (including their labor costs) solely through the revenue generated by their operations. In 2011, the USPS received approximately 100 million dollars a year in taxpayer money to fund the expense of providing free mail for legally blind citizens and sending election ballots to American citizens living overseas. The fiction that the post office is waste of taxpayer money is simply that: fiction. No tax dollars are used to cover the operating expenses of the USPS.

          Recently the post office has been a victim of remarkably bad legislation and a remarkably bad economy. In 2006, the Postal Accountability and Enhancement Act was passed. This required that future costs of retiree health benefits be completely prefunded at a 100% level – for the next 75 years. There is no other federal agency that is burdened with a similar requirement. Since 2006, the cost of meeting this new requirement has cost the USPS approximately 5 billion dollars a year. This new cost and the economic collapse that began in 2008 has been financially devastating. To control costs, the USPS has been reducing their labor at an unprecedented rate. In 2002, the USPS had approximately 752000 employees. That number had dropped to 551000 by 2011 representing a workforce reduction of more than 25% within a decade. More labor reductions are planned.

          The conservatives are not trying to save the post office; they are simply trying to destroy one more unionized workforce. The USPS plays a vital role in the American economy. More and more people receive their prescription medication through the mail. The internet has made it easier than ever for people to engage in the buying and selling of merchandise. However, that merchandise must be delivered and the reality is that private delivery companies do not service the nation’s entire geographic area. The conservative’s hatred of organized labor is weakening a vital component of the American economy.

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You buried the lead, imho

geomoo's picture

 

The Postal Accountability and Enhancement Act is THE reason conservatives can scream that the post service is in trouble.  It was passed specifically in order to create an excuse for privatizing.  It is likely that no business in operation today could survive such absurd requirements.  Being required to fund now the health benefits of future employees who won't be born for a few more decades--it is absurd.  Of course, if privatized, there would be no such care for employees.  This is coming at a time when retiree health benefits are being decimated, with these same conservatives leading the charge.

This is an outright scam and nothing less.

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not only unfair but unnecessary

sartoris's picture

The requirement to 100% fund retiree healthcare for the next 75 years is absurd.

I didn't want to just focus on this one aspect. It's my opinion that the myth that the Post Office is taxpayer funded is what poses the greatest danger to the organization. Ask people you know if it is a taxpayer funded organization. You'll be surprised at how few people know the truth. However, what I really wanted to focus on is the role that the post office plays in the economy. From my perspective, they are an essential aspect of the American economy.

Thanks for reading, Geomoo.

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Yeah, I see what you mean re the focus.

geomoo's picture

I'm afraid my initial response betrays how deeply I've been enmeshed in partisan politics, how my view is colored that the way to get attention is to focus on the Reps.  You are quite right, the broader implications, and the actual importance of the hospital are the important thing.

I think this is the kind of issue that those who care about the commons should focus on.  It's pretty clear, and it's limited in scope.  Like rape in the military.  I think some of these are winnable if we could find a way to make them causes celebre without depending on mainstream media.

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Great article about the role the USPS plays in our

Glinda's picture

society, how conservatives are trying to destroy unions, and how the Postal Accountability and Enhancement Act is the direct cause of workforce reduction and now no mail delivery on Saturday.

And the Democrats are WHERE ON THIS ISSUE?  Where is the Democratic pushback, fighting, STANDING UP for the people? 

Just curious if there was any legislation offered up or voted on in 2009 and 2010 by the Democratic Senate, House of Representatives, and White House to reduce the mandate for prepayment of pension funds or at least reduce the amount of years to prepay.

I don't know who would be the person and/or organization to bring suit to stop the plans for no mail delivery on Saturday, but there sure is discrimination in that decision:

Saturday mail delivery to P.O. boxes will also continue.

I heard the AP report that a lot of businesses have P.O. boxes and therefore they need Saturday delivery.  Ha!

An hour ago I heard Ed Schultz say that the media is reporting that the reason for no Saturday delivery is because of the Internet and online commerce and bill paying.  Ha!.

Schultz pointed out that Think Progress is reporting this story accurately:
 

The U.S. Postal Service announced on Wednesday that it will discontinue first class Saturday mail delivery, marking another milestone in the decline of the once-ubiquitous government service. But it isn’t a switch to online mail that’s causing the postal demise — it’s Congress.

 

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Democratic legislation was introduced in 2011 & 2012

sartoris's picture

There have been house measures (HR 1351, 3174, 1688 and 1649) that made some headway but never passed.  The Senate passed a bill in April of 2012 that made a great deal of sense, but it never passed the house.

The well known Congressional Idiot, Darrell Issa, has a completely irrational hate for the Post Office. He is blocking all legislation that will end the retiree health care funding mandate. It's the classic conservative strategy of, starve it until it cannot function, and then complain that it doesn't function.

Obama, as usual, is nowhere to be found on this issue.

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In other words, only bills during Republican

Glinda's picture

House control.   The Dems didn't see this coming and try to do something?  And if the Dem House did it, it seems the Senate would have passed it, too.

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I didn't do an exhaustive search for each bill

sartoris's picture

Hey, Glinda. Thanks for reading and commenting. I think this is a remarkably important issue that has real world ramifications for the economy. Too much legislation is passed without considering how it will impact the real world and not the world of theory.

I'm not sure of the exact number of bills that have been introduced since either 2006 or even since 1970 after Nixon signed the first major Postal reform act. I was just showing that some people have tried to stop this nonsense.

We are in complete agreement that the vast majority of the democratic party, as well as the American media (as usual), has done far too little to address this situation.

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And it seems ridiculous to me that if they're going to

Glinda's picture

continue to deliver packages on Saturday and keep the post office open its regular hours and deliver mail to post office boxes on Saturday, they should just continue as they've always done to deliver regular mail on Saturdays.

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the reason they have to deliver Saturday packages

sartoris's picture

They cannot eliminate Saturday service without congressional approval. Therefore, they are simply saying: Saturday residential delivery will consist of only packages, not envelope mail. Yeah, I like the fact that Post Office Boxes will still receive Saturday envelope delivery.

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The whole attack on the post office is based on a lie.

ranger995's picture

No other organization has the standards to maintain wrt pensions that the post office does. Congress has made it so that they basically are declared bankrupt even though they are outperforming most businesses. 

This is all about pressure from the likes of Fedex and UPS who are greedy greedy greedy and don't want to compete against an outstanding government run cheap instittuion.

 

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Yep, the reverse thinking that has become commonplace

geomoo's picture

"Look, it doesn't work to fund pensions 75 years into the future, so the obvious conclusion is we should give all power to a private firm so that they can fund no pensions at all."

I'm with glinda, where is the democratic congress?  Where is the Dem standing up for the people?  They have made some efforts, but it's with nothing like the commitment and zeal the conservatives show in their destruction of public insitutions.

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Oh, and as a matter of interest on a related matter

geomoo's picture

The City of Santa Barbara was successful in its efforts to block the state of Cal. from stealing our parking garages and turning them over to private firms.  I suspect the fact that there is a lot of wealth in Santa Barbara was a crucial factor in the win, but I don't know how that may have played out behind the scenes.

To understand what is happening today, one must read Naomi Klein's Shock Doctrine.  In the case of the USPS, the shock was created artificially in just the way we are discussing.  The shock doctrine is a very effective method for taking the commons away from ordinary people.  It can be practiced across a wide range of arenas, it has been going on for several decades now, and it is highly destructive.  We the people need to start understanding what all these ploys have in common--creation of disasters or exploitation of disasters for the purpose of transferring public wealth to private hands.  Debt servitude is almost always an ingredient.  In the case of the USPS, the debt was created artifically.  The sad truth is that there are those among us who intentionally create debt for the purpose of control; these are the same people who scream about the pressing need to eliminate the national debt.  They know the purpose of creating debt:  it is for private control and private profit.

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they are legislatively blocked from competing with the private

sartoris's picture

Virtually every effort that they make to compete is blocked by congress.

In the 90s, the post office began developing a secure email system that would allow people to make online payments. They rolled it out in 2000. The internet industry cried and whined to congress that this was beyond the mandate of the post office's mission and represented unfair competion. Congress promptly stopped the post office from moving forward with the system. Now, people have their data stolen from the systems provided by private industry that are of questionable security at best.

Also in the 90s, the post office wanted to sell prepaid bank cards and phone cards. Industry cried foul and now one can buy those items at any Wal-Mart, but not your post office. In 2008, the post office began selling postal meter cartridges that carried their logo. Pitney Bowes, one of the largest players in the postal meter industry, huffed to congress that the post office was competing with them and taking the business that rightfully belonged to them. Congress stopped the post office from selling the cartridges.

The post office is even prevented from providing copier services. If you go to a UPS outlet, you'll find quite an assortment of copier services. The post office wanted to offer copier services but congress stopped them after UPS huffed about unfair competion. In some European countries one can buy phones at the post office. Congress won't even consider allowing the post office to provide copier services, do you think they will let them sell phones?

Thanks for reading, Ranger. Good to see you, again.

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The public sphere is under seige

geomoo's picture

This is not an overstatement.  Quite an depressing run-down of the US Congress working to create dysfunction.  Thanks for the info.

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My post office has a copier.

Glinda's picture

You pay with coins to copy whatever.   That's not what you mean, though, right?

The post office is even prevented from providing copier services.

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right, I meant extensive copier services

sartoris's picture

Right, sorry. I thought I typed that thought but it must have just stayed in my head.

The post office cannot offer copier services beyond that which can be provided by a simple copier machine. No color copying, no collating, no book binding/copying, no 3 D color charting whiz bang gee whiz ma type of stuff. My post office has a copier machine that looks like it was bought when Carter was elected. It's a sad, sad copier. If you have ever been inside a UPS outlet you would be astonished at the sort of copier services they provide. It's just a sideline of their actual business, however, it brings in revenue. That's the sort of thing that the USPS could do to bring in revenue, if they were allowed.

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