The USPS is in Dire Straits Again

I find it interesting that the New York Times even reported this. So, what went wrong? Of course the article is filled with the obligatory, "e-mail led to an ever decreasing amount of conventional mail" excuse. I wonder how much of an effect the telephone had on conventional mail usage? The real problem is usually avoided by most media.

The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will not be able to make a $5.5 billion payment due this month and may have to shut down entirely this winter unless Congress takes emergency action to stabilize its finances.

The post office’s problems stem from one hard reality: it is being squeezed on both revenue and costs.

As any computer user knows, the Internet revolution has led to people and businesses sending far less conventional mail.

At the same time, decades of contractual promises made to unionized workers, including no-layoff clauses, are increasing the post office’s costs. Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors. Postal workers also receive more generous health benefits than most other federal employees.

So there is only a 20% operating budget for anything other than labor? That's ridiculous; with numbers like that it would seem that the Post Office exists as a method of employment first, if they get the mail delivered that would be nice too.

This is a glaring example of the of government idiocy. Many postal workers are going to end up without jobs at the end of this. If the operating budget is 80% labor; how will the USPS decrease costs when union wages are non negotiable. It's simple math really, the USPS must reduce their labor costs because it's largest single expense they have. Their only other option would be to decrease the time that employees are on the clock. The effect is the same, labor costs will go down, and USPS employees will take home less in wages. The American Postal Workers Union, APWU, and the National Association of Letter Carriers, NALC, have effectively priced their employer out of the market.

I think this is a very telling story of how the "The Goose That Laid the Golden Eggs" can't always keep giving. Government is going broke because of excess spending and lack of insight. The USPS is no different.

What exactly will happen? Who knows. I suspect that Congress will step in and allow the USPS to maintain some ridiculous amount of debt. After all, how can Congress criticize; they just raised the entire country's debt limit while ignoring the causes of debt. The USPS will do the same.

There is no reason for the USPS to change because its oversight is provided by those who are in the same boat.

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