The U.S. Postal Service is in a precarious financial situation, telling Congress it faces the "equivalent of Chapter 11 bankruptcy." Losing billions of dollars a year, it is considering whether to close more than 3,600 post offices and lay off tens of thousands of workers.
The service faces many problems, including a drop in mail volume in recent years. But the service, which employs nearly 572,000 people, says some of its difficulties are inflicted by the federal government – through a law governing how the agency funds workers' retirement health benefits.
In 2006, Congress passed a law requiring the Postal Service to wholly pre-fund its retirement health package – that is, cover the health care costs of future retirees, in advance, at 100%. The Postal Service, which is a corporation owned but not funded by the federal government, is the only government-related agency required to prefund retirees' health benefits.
"No one prefunds at more than 30%," said Anthony Vegliante, the service's executive vice president.
Sally Davidow, spokeswoman for one of the unions that represents postal workers, calls it a "a ridiculous requirement."
"(The requirement is) so ridiculous, Congress doesn't do it. No other government agency does it. No private businesses do it," she said. "It's $5.5 billion a year, every year, for 10 years. That's what is causing the problem.
"The law was passed in 2006 and lo and behold, ever since 2007, the Postal Service has been suffering a tremendous debt."
The Postal Service reported a net loss of $8.5 billion last fiscal year.
The American Postal Workers Union and the National Association of Letter Carriers don't want to lose the benefits. But Davidow says a solution is possible.
Click the audio player to hear the rest of the story from CNN Radio's Jim Roope, and hear what Davidow says should be done, and why some legislators oppose the plan:
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Ways to Cut Costs:
1) Stop using union labor.
2) Cut benefits (like most companies have had to).
3) Stop delivering mail on the weekends.
4) Stop delivering junk mail at all.
5) Privatize. This isn't the wild west anymore – we don't need you as much as we once did.
Junk mail is the biggest source of income for the USPS right now.
Ways to Cut Costs:
1) Stop using union labor.
Yep, we need more minimum wage and part time jobs with no benefits.
2) Cut benefits (like most companies have had to).
Companies haven't "had" to cut benefits, they've done it to increase profits, not survive.
3) Stop delivering mail on the weekends.
Agree, it's not necessary
4) Stop delivering junk mail at all.
It's one of the most effective means of advertising. When was the last time you actually opened any of your spam email?
5) Privatize. This isn't the wild west anymore – we don't need you as much as we once did.
You want everyone to be forced to pay more for the letters, cards and packages? – why?
and, just because "you" don't need a service, doesn't mean other people don't.
"Junk mail" is what is keeping the revenue stream somewhat stable for the USPS. How many letters have you sent recently?
Actually "junk" mail is a money maker - not only for the post office but for the companies that use direct mail advertising, the printing industry, the graphic design industry, If direct mail stopped, a lot more people than postal employees would be without a job.
Most of my family works from the post office. Lets cut your wages and see if that makes your life better. Only in America are people stupid enough to believe that unions are bad and a fair wage is a bad thing. Why don't we go back to the times before labor laws. Lets all work 18 hours a day with no over time. Guess what, those times are gone because of unions. Anyone who doesn't understand that is an idiot. Just like you.
Yep, and the craziness around health insurance bennies has to end- people will take what you give them, even if it's a ride off a cliff! I too take what I can get, but to create a false sense of security that the government will solve life, death and keep paying for everything despite bad planning, well, that's just really misguided and thoughtless and leads to more and more to dissatisfaction, which leads to unbalanced ineffective policies based on hasty decisions made by fearful people. Sound familiar? Thoughtful mindful folks will generally be able to benefit from the dynamics in the world no matter what is going on, opportunities are always there but changing. Problem is kids, the elderly and disabled really do need societies help. So, when someone or some company or some gov. agency is inefficient &/or irresponsible, it effects all of us. Act right people, just act right. Teach your kids to act right, and call people on it when they don't. And for heavens sake, try to figure out who to vote for that will end nanny state policies that create irresponsible dependence. Want to keep someone down? Give them crappy handouts until they are doomed because they never learned to suck it up and work hard and plan well and SACRIFICE for their own good. Like I said, the thoughtful will figure out a way, no matter what, it's how the world works. But we don't have to leave anyone behind. We just need to plan better starting now, no matter how much people complain. It has to be done. Sacrifice and smart planning have always been the make or break dynamic in society and in peoples personal lives. Do it!!
Junk mail produces tons of income for USPS. Also, if privatized, one of the first routes to be cut would be the rural areas.
Hey Trevor, thanks for your families hard work. Aside from the drama, the company you work for needs to change. If you want to keep your wage, great, obviously we all do / good point. But do you really fail to see that the policies of your company need to change? You and your family won't have jobs dude! Pay as high a wage with the best bennies as possible, that's what every manager wants to do to insure low turnover and high quality, happy workers. But the article says your bosses are losing TONS of money and you won't have a job at all if they don't change. Unions cannot be faulted for trying to get all they can for their members, right up until they screw themselves by taking too much and sinking the very ship they are in. Kind of a duh type thing, don't you think?
Man are just greedy in nature. Sure, you have the abuse of workers without the unions but if you do have union, well, it bankrupts cities, companies, and eventually the nation. Companies that are less scrupulous would have just sent the jobs to China and third world counties just to abuse them with low pays with no benefit.
Capitalism works for the greater benefits only if it is not top-heavy oriented (extremely twisted allocation of resources). I do not see why executives that has no licensing exams to attend every year, not working 12 hours per day or travelling for businesses reasons should merit a six-figure salary, easy with millions in bonus. Sure, the government should tax them the most but the monkey brains at Congress just could not comprehend how easy it is to beat tax codes with the attorneys that they could afford.
Bottomline, the revolving door policies that we have in the Capitol Hill means that businesses, especially the big one with ambiguous ethics, would and could always beat the law clean and first. It takes the outcome of one emergency board meeting to beat the law that has been lobbied, argued, and delayed for months.
That law needs changing
By B-I-L works for the postal service. He told the hubby and I about a post master, aka high ranking manager, who wanted to move from Texas to California. The post office bought the post masters house in Texas at an inflated price only to turn around and sell it for a loss. The post office then turned around and bought the post master a house in California, again at an inflated price, then in less than a year they had to sell it when the post master decided he wanted to move back to Texas. They took another loss on the California house and bought another inflated house in Texas.
This behavior is what sinks a company. That along with the top heavy management are tanking the post office. As with any other major corporation, the way to save money is to cut the fat (aka trim down top heavy management), and to cut money wasting exercises such as buying residences for high ranking personel when they decide to move on a whim. While I do not use the post office that much I must say I enjoy sending and receiving letters in the mail from family and friends. I would surely miss the birthday and Christmas cards that only the USPS can delivery.
That squares with what the person who maintains their office building told me about the gripes and complaints he gets from postal employees who are not working at a postal facility and yet make 6-figure salaries. The workers complain that the postal service forces them to pay $20K for a $400K home for which the postal service paid most of the costs.
The postal service and other government and quasi-government "businesses" don't operate like private enterprises. They are insulated from economic realities that the private sector has to contend with. It is time that these privileged employees whose salaries are paid by those of us who do not have their perks, privileges, and salaries get out of their ivory towers and come down to see how the rest of us have to live.
I'm guessing that this story is slightly exaggerated. Many companies have a house buying policy for employees that they relocate; it's not done at an inflated price, however – it's based on the average of some number of appraisals, which should be close to FMV. The company then sells this house ASAP and do it so the person that they are asking to move doesn't have to deal with the stress/hassle/timing required to sell a house before they move. I'd be surprised if the USPS bought this person a house on the other end; they may pay closing costs since generally the company is asking the employee to move and creating expenses that wouldn't exist if the employee stayed put and therefore choose to cover these costs.
I highly doubt this employee asked to move, either. They may have applied for a job, but I can almost guarantee he didn't say "hey, I'd liike to try living in CA – buy my house in TX, buy me a new house in CA, then do it again if I change my mind."
Then again, this is the USPS and they don't always do things logically. But somehow I have a feeling this is one of these stories where someone knows a little and it grows into the most egregious example of waste ever seen.
Why doesn't this story point out that they get their health care really cheap? According to the OPM website, a government worker pays $199.20 every two weeks for Blue Cross family (plan 104). A postal worker pays $63.81 for the same thing. The Post Office should begin by ending the extra subsidy and requiring their people to pay the same amount as all other government workers.
What other Federal Agency (other than the military) is this labor intensive and physical? I work out in the elements 8-12 hours a day. I bet you couldn't do it.
Well, the Dept of the Interior's Forest Rangers come to mind.
II know a lot of post office employees who got to retire in their 50's at 50% retirements plus. That is just plain ridiculous in this day and age. Also, post office cannot be sent to other post offices to work. It is a union rule. Stop Saturday mail delivery (unneccesary OT) and change the stupid union work rules or risk getting laid off. Ultimately, the union is responsible for the excessive compensation for an unskilled job.
There isn't an unnecessary OT on Saturday. There is a classification of employee called a T6. They have 5 routes in their group, and they deliver on the regular carrier's day off. If we go to a 5 day deliver, then this employee has no job.
No one can spend or give away more than they make/have, that goes for individuals, governments & yes even the post office. You can't just give someone a job with incredible benefits because people need jobs! Those jobs need to produce more than they take.
Few companies pay 100% insurance while employed or retired. Get a clue. Too much pay for delivering junk mail. Too many free lifetime benefits. Do away with it, and let other resources take over. It is like gas, until you have to pay a high price, americans won't do anything about it.
My dad has worked there for thiry years and this is exactly what he told me is the problem. Pres. Bush did it!
Bush and his cronies did it knowing full well what it would do to the Post Office's bottom line. Then they could feed "privatize" to the right wing citizenry.
Let Fedex or UPS deliver an envelope across country in 5 days for 44 cents. They won't. Fedex and UPS are not hampered by gov't regulating their pricing.
So government really is the problem and not the solution – even unto itself!
let's see...pay more on insurance and keep your job or demand to keep insurance premiums down and ultimately lose your job. these people are ignorant.
Every contract the Unions agree to pay more for their health benefits.
It just seems that the Postal Union will cut their nose to spite their face, as many Unions seem to do. Granted, the 100% pre-coverage seems ridiculous as well. Combining these two problems seem to be a "perfect storm" for the USPS.
Time to end the bloated salaries and privileges of government and quasi-government employees.
Let's not forget to include the congresspeople and their staffs. They favor the rich because they are the rich. No way do they represent us in the lower and middle classes.
One way to realize some savings is to station postal workers at nearby private stores where they can continue to serve the public. They would not be required to wear the full uniform but only one item that denotes they are from the postal service (thus, realizing a savings in uniform costs and laundry costs).
Expensive processing machines could be rolled back to use simpler machines or hand-driven devices to cancel mail when processing mail, etc. And hours could be cut back to a maximum of six hours a day with no weekend work if they were to continue working at a regular postal office.
Retirement benefits could be capped at an early stage right after hire and to affect those with tenure, for instance, to reflect on and depend upon the years of service only instead of a Blank Check regardless which cannot continue and that no other federal benefit service allows.
Wake up elected representatives in Washington from your lobbyist paid meals and begin the orderly scaling back of the postal service. I could get mail delivery one day per week and it woul be fine.
That way when it's nothing but a part-time work force and your carrier doesn't "feel like" working that week, no mail. Maybe next week. Too cold. "It's not my mail, I deliver it next week". Too much snow/ice. Next week. Too hot. Next week. It's raining. I'll get to it next week. My other job wants me to work because I can't live on the salary the Postal Service is paying me. I'll deliver the mail next week.
Too many employers in every office and on the field. Unions are the source of problems – anyone knows how much money go to unions? B
Yes, and I pay them proudly! I pay my dues, not the Post Office. They pay me to work. I pay the dues to ensure I have good pay, benefits, a good working environment, paid vacation, sick leave, representation, rights as an employee. Shall I continue?