Most here have heard about the insolvency of the USPS and its need for a federal bailout by the end of the month. What’s interesting about the USPS and its inability to compete and thrive is that it is plagued by those same symptoms that makes most government programs stodgy and un workable, namely , inefficiency, bloat, unable to compete in the market place, antiquated business model and equipment, and union protected workers who are in no fear of consequences for poor work production. This is not to say that all postal workers are deadbeats, but it does foster an environment where, unlike the private sector, there is no incentive or motivation to excel, no reward for individual achievement.
In the past that federal safety net has allowed the USPS to keep doing that they’re doing regardless of the losses piling up, but in the next few weeks, somebody will blink:
Facing a projected $6.4 billion loss this year, the United States Postal Service may be forced to shut down this month if Congress doesn’t take action.
A cushy relationship with the postal workers unions and flailing efforts to stem customer migration to the Internet have pushed the Postal Service to the brink of insolvency. The NYT reports that the agency will be unable to make to make its $5.5 billion payment to its employee healthcare plan by the Sept. 30 deadline.
The two factors that weigh the heaviest and are guaranteeing the USPS to fail are these:
Eighty percent of the Postal Service’s annual budget goes toward employee salaries and benefits.
We don’t need to look for the union label here. When your competitors do not have your overhead and can provide the same service cheaper, you are in trouble. Although no one is asking the USPS to run itself like a business and make a profit, to break even would be nice, can’t do it when you are not allowed to trim your staff or pay them what the market demands.
Despite the agency’s economic woes, the 250,000-member American Postal Workers Union negotiated a cushy labor deal with the USPS in March.
Here is the house that fell on you. Who ever it was on the government’s side that signed off on this little extortion package, images of a woodshed come to mind.
We have talked about unions before and how it is their job to get the best deal possible for it’s members, but this assumes that the other side will at least put up a fight and negotiate, this was no negotiation, it was a mugging. The annual raise provision was insulting given that many government workers are taking pay cuts in an attempt to keep their job, but this “no layoff” clause, holy smokes, who would buy off on such nonsense?
Given the illustrious history of the postal service who’s very existence is authorized in The Constitution (Article I, Section 8, Clause 7) and how I still use it from time to time (monthly bills paid online but unusual stuff like a doctor bill) I don’t wish the demise the USPS. But neither can I continence endless year after year bailouts to prop up an entity that would have gone tits up years ago if left to free market survival. Closing some branches and eliminating Saturday service, is a nice first step. Allow the government to break the union contract and terminate 20% of the work force like it wants to do. Re negotiate salaries and benefits. Other union members are shouldering a bigger portion of their retirement and medical coverage costs, you guys can to. No more bailouts for poorly run government agencies, what happened to that era of austerity I heard about?