Don't lay off 120,000 postal workers in the middle of a jobs crisis

First, do no harm.

I appreciate that the U.S. Postal Service is facing a world of reduced revenue due to the Internet. But right now, in the middle of a yearslong jobs emergency, is not the time for talk of layoffs.

Until the jobs crisis is resolved — i.e., for the foreseeable future — the USPS should not be considering 120,000 layoffs. Until the jobs crisis is resolved, the USPS should not be considering 120 layoffs.

It should not even be uttering the L-word out loud.

Slate’s Annie Lowrey reports that:

The fiscal situation at the USPS is bad—really bad. According to its most recent quarterly report, the USPS lost $3.1 billion between April 1 and June 30. Add that to billions of dollars in losses racked up since the recession hit—the USPS has been in the red for 18 of the last 20 fiscal quarters. It has also amassed tens of billions in unfunded liabilities, mostly in pension and retiree health-benefit obligations.

The problem is not mismanagement. The problem is that the USPS has an enormous, expensive physical and human infrastructure. It operates more than twice as many U.S. outlets as McDonald’s. It runs the largest vehicle fleet on Earth. It has a staff of nearly 600,000, despite considerable reductions in the last decade. To pay for all those people, trucks, and buildings, the USPS needs to handle a lot of mail. …

Mail volumes have plummeted more than 25 percent since 2006. Moreover, the mix has gotten cheaper — more bulk mail, fewer first-class letters. … The USPS plunged deep into the red in 2007.

Those are daunting numbers. Almost as daunting as the numbers facing the newspaper industry due to its own struggle to retain revenue in the face of competition from the Internet.

What did the newspapers do in response to those numbers? Mass layoffs. It didn’t work.

It didn’t work at all. It so utterly failed to work that it’s astonishing that anybody would even consider saying, “Hey, I know, let’s try what the newspaper industry tried!” The stupid and cruel approach turned out also to be ineffective.

There’s reason to think it wouldn’t be effective for the USPS either. The Great Recession hit the USPS hard. Just like any other business, they’ve seen their revenues drop along with aggregate demand and the total number of employed people. Whatever savings might be gained from layoffs would also exacerbate the current jobs crisis — further reducing overall demand and thus, also, worsening the USPS’ current revenue problems. The expected cost-savings would thus never fully materialize.

So the timing would be bad for the USPS as well as for the economy as a whole. Layoffs amidst a jobs crisis mean less benefit and less savings for the employer. And layoffs amidst a jobs crisis mean increased hardship for those laid off.

Fortunately, layoffs aren’t the only measure being considered:

To help ease the immediate cash-flow problem, the USPS wants Congress to drop a requirement that it prefund retiree health care benefits — staving off financial apocalypse for a year or two and giving time for other changes to take effect.

Right now, the service is paying for retiree health benefits for letter carriers who haven’t been born yet and who, thanks in part to such accounting rules, might end up born into a world without a U.S. Postal Service to work for.

Devin Leonard’s BusinessWeek cover story, “The U.S. Postal Service Nears Collapse,” looks at some of the innovative steps European postal services have taken to reduce costs and increase revenues, including things like:

… [Creating] digital mail products that allow customers to send and receive letters from their computers. Itella, the Finnish postal service, keeps a digital archive of its users’ mail for seven years and helps them pay bills online securely. Swiss Post lets customers choose if they want their mail delivered at home in hard copy or scanned and sent to their preferred Internet-connected device. Customers can also tell Swiss Post if they would rather not receive items such as junk mail.

Sweden’s Posten has an app that lets customers turn digital photos on their mobile phones into postcards. It is unveiling a service that will allow cell-phone users to send letters without stamps. …

Brad Plumer notes that the service has other options as well:

One thing that doesn’t often get noticed about the U.S. Postal Service is that it has vast — and extremely valuable — real-estate holdings on its books. Many post offices, after all, are in prime positions in the center of town. But no one knows how much the buildings are actually worth. The Postal Service values its properties at their purchase price, rather than their fair market value. The total purchase price value comes to about $27 billion, but since many of these buildings were bought decades ago, their fair market value is presumably much, much higher. …

So, back in July, the USPS Office of the Inspector General came up with a novel idea: “If the Postal Service were to leverage its real property assets at the fair market value, that amount would likely cover the remaining $55 billion of unfunded liability in its retiree benefit funds.”

There are many more possibilities and ideas being considered for revitalizing the USPS and strengthening its fiscal footing. Considering the challenges it faces, everything should be on the table — everything except layoffs.

Not now. Not in the middle of a jobs crisis.

Because the first rule, as always, is do no harm. And 120,000 more public sector layoffs in the middle of a massive jobs crisis would do a great deal of harm.

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  • Stack5857

    there is mismangement in the USPS, there are to manys VP’s. There are teams of magement people that go around and inspect POs just to make sure everything is neat and orderly,(no pictures of your kids on your cases) this cost hundreds of dollars and it is done all oveer the country. Hundreds of dollars will add into thousands. We are order to drive many miles to delivery a letter or post card if the machines happen to case the in the wrong spot in our mail. I have driven 18 miles to deliver a 45 cent post card, at a cost to the PO of about $15. Where did we make any money there. When mangement starts to make wise money saving mandates it will time to go, because the more money it takes the better they like it.

  • Consumer Unit 5012

    It’s a good thing the USPS _isn’t_ a for-profit enterprise, or all those people who live out in the boonies would be paying 16$/letter OR have to drive to town once a day, instead of a uniformed government official driving out to them.

  • Anonymous

    Except all those guys driving out into the boondocks to ensure daily mail delivery (except on Sundays) through snow, or rain, or hail, or 100-plus temperatures, aren’t doing jack, CU5012.  They’re roustabouts, sucking at the teat of public largess, doing nothing at all, providing no service whatsoever.

    Now, FedEx, they’re the way to go.  Everyone should use it.  Just check out these competitive rates for shipping a 0.1 lb parcel/letter to the same zip code!

    FedEx First Overnight®

    65.21

    FedEx Priority Overnight®

    29.56

    FedEx Standard Overnight®

    25.70

    FedEx 2Day® A.M.

    21.22

    FedEx 2Day®

    18.86

    FedEx Express Saver®

    15.30

    FedEx Home Delivery®

    9.99
    (The rates are the same if the letter is 0.1 lbs or 0.01 lbs, so I guess 0.1lb is the lower limit.)

    Screw $0.44!  Ten bucks is where it’s AT!

  • Anonymous

    Screw $0.44!  Ten bucks is where it’s AT!

    butbutbut if we killed the Postal Service, the market would either compel FedEx to ship letters at 15 cents each, or vomit forth a new company willing to do the same.  And those letters would take eight hours to reach anywhere in the country, and would arrive with 100% reliability.  And would be scented with rosewater.

  • BUDDA

    here’s why the postal service is losing billions… at our plant we cut open all crt bundles on the f.s.m 100. correct me if i’m wrong they get a discounted rate, and here we are cutting them open, then running on a program 3 TIMES before that same bundle goes out the door in a flat tub..COME ON AMERICA WAKE UP!!!!!!!! SO THEY MAILER PAID .39 CENTS FOR A BUNDLE, BUT THE POSTAL SERVICE SPENT $29.00 TO GET IT OUT OF PLANT, TIME MILLIONS..

  • http://twitter.com/FearlessSon FearlessSon

    Forgive me BUDDA, but I cannot comprehend what you are saying.  Perhaps if you could describe the process a little more carefully?  And the lines written entirely in capital letters tend to make the form distracting to the content.  

  • http://twitter.com/FearlessSon FearlessSon

    Forgive me BUDDA, but I cannot comprehend what you are saying.  Perhaps if you could describe the process a little more carefully?  And the lines written entirely in capital letters tend to make the form distracting to the content.  

  • Anonymous

    I think I sort of do, but it’s couched in a lot of postofficeese.  Basically, bulk mailers send in a big bundle of mail, which the post office then converts into a whole crap load of individual mail pieces, which are all run through the post office machines multiple times to route them before they all get placed individually onto carriers routes.

    The basic problem with this is if I’m sending 10,000 letters to 10,000 people in a zip code, that doesn’t need to be sorted at the RECEIVING post office – it needs to all go to the destination post office, where it only needs to get sorted once – instead the bundles getting broken apart as soon as it arrives at the sorter and then gets scanned and sorted at EACH BOUNCE until it gets where it’s going.

  • Lori

    I don’t actually live in the boonies, but I do live in a pretty small town (less than 2k). About a quarter of the town doesn’t actually receive mail deliveries to their individual homes. Instead there are centrally placed group boxes, kind of like what you would have in an apartment building. It’s not a major inconvenience for us. I don’t think anyone’s box is more than a block from their house. It does save the post office a lot of money because mail delivery is so much faster. 

    This is the only place I’ve ever seen these kind of mail boxes for single family homes, but I wonder if they’ll become more common as USPS budgets get tighter. 

  • Anonymous

    About a quarter of the town doesn’t actually receive mail deliveries to
    their individual homes. Instead there are centrally placed group boxes,
    kind of like what you would have in an apartment building. It’s not a
    major inconvenience for us. I don’t think anyone’s box is more than a
    block from their house. It does save the post office a lot of money
    because mail delivery is so much faster.

    That’s standard in USAF base housing, at least everywhere I remember living.

  • http://apocalypsereview.wordpress.com/ Invisible Neutrino

    I really didn’t like that when Canada Post started doing it. I thought it was a rather lazy and cheap way to cut costs, although granted, I’d be less hacked off about it if they’d have compensated with Saturday and Sunday delivery.

    We haven’t had Saturday delivery in Canada in over 25 years now, and Canada Post itself has become the favorite target of right-wing politicians eager to get votes without having to do any of the spadework; all they do is recite a stock laundry list of lol inefficient workers and zomg private sector can do better and blah blah blah.

    It almost makes me think the regular increases in stamp prices are deliberately structured to annoy people to the point of agreeing rashly with some pompous windbag’s idea of “incentivizing efficiency in Canada Post”.

  • Lori

    I don’t actually live in the boonies, but I do live in a pretty small town (less than 2k). About a quarter of the town doesn’t actually receive mail deliveries to their individual homes. Instead there are centrally placed group boxes, kind of like what you would have in an apartment building. It’s not a major inconvenience for us. I don’t think anyone’s box is more than a block from their house. It does save the post office a lot of money because mail delivery is so much faster. 

    This is the only place I’ve ever seen these kind of mail boxes for single family homes, but I wonder if they’ll become more common as USPS budgets get tighter. 

  • casual

    They need to get rid of the dead weights at the post office that’s why they want to get rid of these people who are over paid doing nothing since there’s no mail to process and most of the mail are standard junk mail that nobody wants.People should start paying bills on line and they should Fed ex or UPS for their packages it’s fast and packages comes to you in good shape cheaper too.

  • P J Evans

    Cheaper?
    You have to be joking. Or you’ve never, ever actually used any of the parcel services.

  • Cissa

    OK, so it’s got more bulk mail. Raise the rates on bulk mail. Gods know i still get WAY more bulk mail than I want, and it goes directly into recycling, usually without me looking at it for more than a moment.

    Make it more expensive to spam me with huge numbers of catalogs.

    I really don’t know why I- who make stuff and mail it via the USPS- am funding bulk junk mail that no one wants but that it’s SO cheap to send.

    Also: it is my understanding that the USPS was not actually designed as a profit center; it was designed to make our country more coherent by facilitating communication. I suspect Reagan et al. were the ones that decided it- like Amtrack- needed to be profitable- and thus tossed aside the greater good that both provide.

    I do not see why that attitude is sacred.

    Or, if it is- then we really need to defund the defense department, say, because gods know THEY are pure expense and no income.

  • Cissa

    OK, so it’s got more bulk mail. Raise the rates on bulk mail. Gods know i still get WAY more bulk mail than I want, and it goes directly into recycling, usually without me looking at it for more than a moment.

    Make it more expensive to spam me with huge numbers of catalogs.

    I really don’t know why I- who make stuff and mail it via the USPS- am funding bulk junk mail that no one wants but that it’s SO cheap to send.

    Also: it is my understanding that the USPS was not actually designed as a profit center; it was designed to make our country more coherent by facilitating communication. I suspect Reagan et al. were the ones that decided it- like Amtrack- needed to be profitable- and thus tossed aside the greater good that both provide.

    I do not see why that attitude is sacred.

    Or, if it is- then we really need to defund the defense department, say, because gods know THEY are pure expense and no income.

  • http://www.facebook.com/people/Burt-Lancaster/100000796521162 Burt Lancaster

    Being a city letter carrier, I hear both sides of the argument.  To layoff or not to layoff, 5 day delivery or keep it at 6?  I just want to keep my job!  I’d be curious to know what the value of the property the USPS owns is…Sounds like enough to pay off some debt?  However, if you close post offices all over America, you still have an obligation to your customers, so where are you going to move to?  Moves that are supposed to save money I think will still cost you money, but it’s worth looking into.  I wish the USPS would embrace the same technology that is killing it and make some money off of it…Why can’t the USPS sell apps for smart phones, or downloads for movies and music?  There is money to be made, but it’s all about the game of politics and unfortunately, employees like me will always lose…

  • http://www.facebook.com/people/Burt-Lancaster/100000796521162 Burt Lancaster

    WTF?  How’s this story?  Then, as Mr Pecksniff and the young ladies were enjoying their coach ride, a large group of disgruntled youth appeared practically out of nowhere.  They called themselves a “flash mob”, then they attacked Mr Pecksniff and the young ladies, robbed them, then beat them within a inch of their lives, then set the heavy coach on fire, as well as the neighborhood before disappearing as quickly as they appeared….

  • Anonymous

    man what?

  • Beatrix

    “Because we don’t need to add a quarter million more unemployed people.  And I would be quite happy to extend that immunity to the rest of the populace.”

    Fabtastic!  Write up a plan and get it to Barack, stat!  He can probably pass an immunity-extending law, or something.  (Seriously, I repeat, you are all basically acknowledging that public employment is welfare.)

  • Beatrix

    Old Carrier – I’m not dismissing any of this, or trying to devalue the work you’ve done or the relationships you’ve formed, but what exactly should I say?  If a branch of industry is outdated, then it is.  Downsizing a moribund Post Office won’t take your memories away from you.  What about a freeze on hiring, at least? 

  • Old Carrier

    Beatrix- There has been a freeze on hiring for several years.  Most offices have routes that are not covered and the remaining carriers have to split up the routes and carry sections after they are done with their own work.  Overtime is through the roof because management feels it is more cost effective to work the current employees to the limit rather than hire cheaper flexible help.  There is still plenty of mail and our share of the parcel market has just increased by a healthy amount due to the new flat rate priority boxes. If Congress would back off on the requirement to pre-fund our health benefits for 75 years in advance (no other government agency or private business is required to do this) and return or credit the postal service for overpayments to it’s 2 retirement systems (billions of dollars due to a faulty formula that has been pointed out by 2 independent accounting firms), we’d be in relatively good condition.  The trouble is that the people who don’t rely on the postal service seem to think that there is no need for it.  There are still many businesses and other customers that depend on the mail because it is cheap and dependable.  How many other government agencies send around a representative to your home 6 days a week to offer you a service?  
     

  • Beatrix

    Sgt – no.  What I say is correct or it isn’t.  My life is not your concern, anymore than yours is mine.

  • Anonymous

    We don’t say that we need to shrink the army because it’s won us less in tribute than it has cost to equip.

    Ah, of course… so that’s how the Republicans plan to fund the scraps of government left over after they eliminate taxes entirely!  Why didn’t I see it before!?

    In my case, because those defense contractors have already made a shitton of money and don’t actually need jobs.

    The companies, sure, but the contractors themselves… not necessarily.  Remember the ‘benefit’ of PMCs is that contractor’s are paid less than soldiers.  (Of course, it doesn’t actually help much, given they end up paying the *company* more overall. 

    WTF?  How’s this story?  Then, as Mr Pecksniff and the young ladies were enjoying their coach ride, a large group of disgruntled youth appeared practically out of nowhere.  They called themselves a “flash mob”, then they attacked Mr Pecksniff and the young ladies, robbed them, then beat them within a inch of their lives, then set the heavy coach on fire, as well as the neighborhood before disappearing as quickly as they appeared….

    “In the ensuing hours, hundreds of staffers at the Department of Workforce Security sprang into action.  The peasant’s concealment had been good… but not perfect.  Pseudonyms were identified, IPs were traced, coordinators determined, web data matched with surveillance data and locations were found.  The perpetrators vanished into the bowels of DWS Employment centers, where further information was extracted.  Though they pretended to know little, collaborators were quickly identified.  Within 19 days of the incident, the peasantry was called forth for a mass castigation.  Within 5 days of that, the last  screams fell silent…It was later determined that the cause was undue unsupervised access to local dataweb connections.  Accordingly, harsher restrictions were promptly put in place, requiring the access codes of a Gentry-plus citizen for any form of Web access.”
    I have no idea what brought on that spurt of cynicism, but there you have it…

  • http://profiles.google.com/nixonislord Nixon isLord

      The workers at the Post Office are too often drones hired as patronage hires because they’re former military or minority hires.  There there to make the people who hired them feel better about themselves.  Too often they’d rather have an easy government job with lots of benefits than a private sector job-assuming they’d even get hired in the private sector.
      Why not do “like Europe” (the constant “progressive” refrain) and make the Postal Service a private company?
      If there’s no need for it, let it die.


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