Even though they don’t have any right to do this, the United States Postal Service has announced that they’ll stop delivering letter mail on Saturdays. Package service will continue. (Congress is supposed to approve all these delivery changes, but somehow the USPS believes they can make it work without Congress this time around.) Before anyone gets all “nobody-needs-mail-anymore” in the comments, I would like to highlight this passage from the Huffington Post story, which explains why this service cut is a response to a completely manufactured problem:

The agency’s biggest problem – and the majority of the red ink in 2012 – was not due to reduced mail flow but rather to mounting mandatory costs for future retiree health benefits, which made up $11.1 billion of the losses. Without that and other related labor expenses, the mail agency sustained an operating loss of $2.4 billion, lower than the previous year.

The health payments are a requirement imposed by Congress in 2006 that the post office set aside $55 billion in an account to cover future medical costs for retirees. The idea was to put $5.5 billion a year into the account for 10 years. That’s $5.5 billion the post office doesn’t have.

No other government agency is required to make such a payment for future medical benefits. Postal authorities wanted Congress to address the issue last year, but lawmakers finished their session without getting it done. So officials are moving ahead to accelerate their own plan for cost-cutting.

Dropping Saturday service is a big mistake that will make the USPS seem more irrelevant than it is. This is a bad move down the wrong path. (Unless this is all some sort of a poker-faced political maneuver to force Congress into dropping the future health benefit requirement, in which case it’s maybe a genius move. But I wouldn’t bet on that.)

6 replies on “Postal Service to Stop Delivering on Saturdays”

  2. I’m generally a big-government, tax-and-spend liberal, but I’m completely fine with scrapping most functions of the post office. I don’t even care that it’s a manufactured crisis. I’m all for protecting good government jobs, but they need to be in the service of something useful.

    6-day a week paper mail service in the age of the internet is simply unnecessary. If I’m running things, parcels get delivered 2-3 days a week and paper gets delivered once, twice tops. The whole thing is just a ludicrous waste of resources to immediately provide materials that nearly always aren’t time-sensitive.

  3. You know, setting aside money to pay for promised health benefits is not a horrible idea. Our city, TriMet and many other local and state agencies are staring into a rather dark abyss because they’ve put no money, or extremely insufficient funding, aside for this.

    Want to know why the city’s budget is perpetually in crisis, look at the police and fire pensions that we pay directly out of current tax dollars because no money was set aside over the years that these promises were being made. (That and Urban Renewal – my personal baileywick.)

    I can’t speak to how it was implemented here, and I support the USPS. But the idea that it is some terrible Tea Party idea to actually set money aside for the pensions and health obligations your making is false.

  4. The public retirement system is pretty much a ridiculous notion on its face: that a good portion of revenue of an organization ought be allocated to people who do nothing, to people who are retired.

    There’s no feasible way to fund an organization like this, regardless of if it is a for-profit or public government agency. It’s simply impossible in the long term to have massive unfunded liabilities unless you expect a massive surge in financial growth.

    An analogy to this would be if you had to pay for your family’s retirement: not just your parents, but your aunts and uncles who failed to properly invest their money. Imagine if up to 30% of your paycheck was taken away, and yet you still had to pay for your own housing, transportation, food and other expenses. You would then create a system where it would be impossible for you, as an individual, to invest your own money and secure your own future, since all of your surplus cash would be allocated to your family. Your only hope would be to come across a huge amount of cash, somewhere down the road, but that’s only a wish, not a plan. Take this example and apply it to an organization: 30% of their revenue going to pay for retired people, which means their overall profits are significantly reduced, which means that investments into innovation (R&D) are reduced, and in the end, the organization suffers significant losses, eventually causing a collapse because they’re paying too much to people who do not contribute.

    Publically funded retirement is a poison to healthy economics. The best way to retire is to make long term diversified investments, the bad way to retire is to count upon the Federal Government or another organization cutting you a paycheck. We need to stop eating this poison and tell public agencies and unions the truth: you need to take care of your investment and retirement portfolio yourself. If we keep guaranteeing retirements, eventually services will be impossible to fund (this is happening now! Look around!).

    I’m all for keeping the post office around, I think they’re actually the most worthwhile service our government offers, and I think we should expand their services. However, there are fundamental changes that could be made: for example, how about we fire people after they’ve worked at the post office for 10 years? Why do we keep this stupid idea that people can work at the post office – the damn near laziest job out there in government – and after 20 years of work they can expect a 20-year retirement? Have you seen the people working the counters at the post office? Fire them, and hire energetic young people. Make it a revolving door, not a pension plan. Don’t let any future employees retire from the post office unless they’re the best-of-the-best.

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