The Post Office Hustle -another rate increase and more wage hikes.

Discussion in 'Economy' started by Trajan, Sep 27, 2010.

  1. Trajan
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    Trajan conscientia mille testes

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    I has a frat buddy who worked graveyard at the Post office thru college, he wound up I found out later, getting his 4 year degree but punted looking for work based on that, he had 4 years in the PO, so he stayed on.
    He retired with 30 in as regional bigwig in 2007, the stories he tells, its simply unreal.

    This, as described below is all dreck, if there was a gov. agency that screamed to be privatized, this is it.........


    With the economy still hobbling along, few industries have pricing power. But neither rain, nor sleet nor recession can stop the United States Postal Service, which wants to raise the price to deliver a first class letter to 46 cents from 44 cents. Congress should refuse and finally force this public monopoly to adapt to the 21st century.

    Next to the public schools, the postal service may be the most inefficient monopoly in America. The post office lost $3.5 billion last quarter, and losses are expected to be a cumulative $238 billion over the next decade, by its own admission. Postal rate increases are supposed to rise under the law only at the rate of inflation, but this latest request is four times the increase in the consumer price index. The federal Postal Rate Commission will decide on the request in early October.

    Meanwhile, mail service to captive customers keeps deteriorating. The snail-mail system now often delivers not to the doorstep but to cluster boxes. It long ago ended twice daily delivery to most business and residential addresses, and it now wants to eliminate Saturday delivery—which, alas, probably makes sense given its declining revenues.

    Mail volume has fallen by 20% since 2007 as tens of billions of letters, birthday wishes and bill payments are now emailed. This trend has long been foreseeable, but the postal bureaucracy hasn't adapted. The same economic forces have buffeted Federal Express, UPS and thousands of private local couriers, but somehow they still manage to turn a profit.

    The difference is that private companies know how to control costs. In 2009, postal service costs grew by 6% even as its revenues predictably fell. Labor costs suck up about 80 cents of every postal service dollar, so any hope of getting to break-even will require cutting the 600,000 postal work force and union benefits.

    Postmaster General John Potter has done an admirable job cutting 36,000 jobs and closing some facilities. But these are band-aids. Congress is no help. Last year it let the postal service skip a $4 billion payment it was legally required to make to its pension and health-care fund, and this year it wants to forgive another $4 billion. This digs a deeper long-term fiscal hole and makes a federal bailout more likely, with unfunded retirement liabilities estimated at $90 billion, according to the Government Accountability Office. For years Congress has caved in to union demands for higher wages while impeding closure of obsolete local post offices.

    This only makes the unions more militant. In an interview recently with Government Executive magazine, APWU president William Burrus laid out his negotiating strategy: "More. More control over activities at work, more money, better benefits—we want more."

    More? Today the average postal worker makes $83,000 a year in wages and benefits, roughly 50% above the average compensation for private workers, according to federal wage data. Those benefits are already so generous the post office could save $560 million a year if the mailman paid the same 28% share of employee health premiums that other federal employees pay, which is still below the norm in the private economy. Normally when a company is losing $16 billion a year in revenues, unions see the need for concessions.

    Rubber stamping one more postal rate hike without at least a plan to cut labor costs only rewards union intransigence and postal service inefficiency. The time has come to free the mail by amending the private express statutes—which confer a legal monopoly on first-class mail—and allow expanded choices for letter delivery. Yes, we know the ritual claim is that this will end universal delivery, but even people living in remote areas would benefit from an injection of competition into the antiquated mail system.

    If someone can deliver a letter for less than 46 cents or a postcard for less than 30 cents, by all means let them. Contract with Wal-Mart and grocery stores to sell stamps and collect packages. The postal service won't avoid its coming financial catastrophe by continuing to raise prices, but it might if it has to compete for customers.

    Review & Outlook: The Post Office Hustle - WSJ.com
     
  2. loosecannon
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    loosecannon Senior Member

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    the article is pure BS. Here is just one blatant lie therein:

    "Mail volume has fallen by 20% since 2007 as tens of billions of letters, birthday wishes and bill payments are now emailed. This trend has long been foreseeable, but the postal bureaucracy hasn't adapted. The same economic forces have buffeted Federal Express, UPS and thousands of private local couriers, but somehow they still manage to turn a profit."

    The USPS was savaged by the internet because people seldom send letters anymore, just bills catalogues and junk mail.

    But Fed Ex and UPS have both seen a windfall due to the inet as online shopping ( and deliveries via UPS/FE) have sky rocketed.

    Those "same economic forces" weren't the same force at all.

    And delivering a letter door to door across the nation for 46 cents is still quite a bargain considering that UPS can't deliver anything for less than $5.

    But, since the inet almost fulfills the core service for which the Postal Service was mandated by the constitution, disemination of a "free and fair press", perhaps the government should take over the inet and charge a modest fee for use. Perhaps even use that inet revenue to subsidize door to door delivery.
     
  3. uscitizen
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    uscitizen Senior Member

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    You think private enterprise can deliver 5 or 6 days a week to every address in the USA for less postage than the postal service does?
     

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