quote:

Even as the price of a first-class stamp rose a penny Sunday to 46 cents, the U.S. Postal Service is operating on borrowed time. “We are currently losing $25 million per day,” Postmaster General Patrick Donahoe warned earlier this month. The agency lost nearly $16 billion in its last fiscal year, and its line of credit with the U.S. Treasury is tapped out.
If lawmakers don’t act, it could run out of money “between six months and a year at most,” said Richard Geddes, associate professor of policy analysis and management at Cornell University.

“There could be a period when mail is not being delivered,” said Michael Crew, director of the Center for Research in Regulated Industries, and professor of regulatory economics at Rutgers University.
The Postal Service said keeping letters moving is its top priority, even if it means defaulting on its retirement benefit funding again. “Although our liquidity situation remains a serious concern, the Postal Service is continuing to prioritize payments to ensure employees and suppliers are paid on time, preventing any interruption in our operations,” spokesman David Partenheimer said via email.

How did the Post Office get into these dire straits when the price of stamps keeps going up?
As it turns out, 46 cents is a really good deal. In the United Kingdom, for example, a first class stamp costs 60 pence, or roughly 94 cents. In Canada, it’s 63 cents (which is about the same in U.S. currency). Geddes said if our postal service was refashioned to be more of a delivery system for still-plentiful but lower-margin commercial mail — ads, catalogs and the like — Americans could pay 30 percent to 40 percent more to send that birthday card — which would bring the price of a stamp to about 64 cents.
The Postal Service is limited in how much it can raise the price of postage, but that’s only one of the factors keeping it from financial solvency.
“The other thing that’s hurt the postal service is it’s an industry where we have scale economies,” Crew said. The post office’s fixed costs — keeping the lights on at its huge network of facilities, maintaining its fleet and paying its employees — are amortized across the amount of mail it processes. “As you increase volume, unit costs decline.”
But volume isn’t increasing; it’s plummeting. First-class mail volume — which earns around three times the profit of bulk mail — has dropped by about a third in a little more than a decade, Geddes said. “That decline is just enormous in a historical context,” he said.
The decline was sparked by the rise of the Internet and exacerbated by the recent recession, when companies cut their budgets for mailings. “About a quarter of their traffic has been lost in the period since 2007-2008,” Crew said. The agency has shed thousands of workers, but it’s losing business faster than it can save money by shrinking its work force.
Crew also blamed “a flawed governance structure and flawed business model” for the agency’s woes. “Any significant changes that have to take place have to be approved by Congress. This is not a way to run a business if you’re in a fast-moving environment,” he said. The Postal Service has expensive benefit obligations for retirees, a bill the agency is currently putting off and on which it owes $11.1 billion.

“The main problem here is Congress had introduced too many conflicting and inconsistent demands,” said James I. Campbell, an attorney and consultant on postal policy.
The USPS has to deliver mail six days a week to everybody in the country who has been sent mail, and it has to maintain a network of around 32,000 post offices — a much bigger footprint than other industrialized nations have. The post office wants to eliminate Saturday delivery, which Partenheimer said would save $2.7 billion a year. But to do this, it needs Congressional approval, which — so far, at least — it hasn’t received.
“Essentially, Congress has got to rethink the legislation that establishes the post office,” Campbell said.

That is easier said than done, even with dire consequences looming. “The information I’ve gotten is not looking good,” Geddes said. “The reason they’ve been able to last this long is because they have gotten the low-hanging fruit … but they’re at they’re bare bones now.”

Wikipedia posted:

The PAEA stipulates that the USPS is to take any surplus at the end of a fiscal year, and put that amount into the Postal Service Retiree Health Benefits Fund to prepay for employees retirement costing the USPS a total of 500 billion dollars between 2007 and 2015. This requirement also explicitly stated the USPS it stop using its savings to reduce postal debt, which was stipulated in Postal Civil Service Retirement System Funding Reform Act of 2003.[4] This is in addition to deductions from pay for federal contribution to social services.[5] This pre-funding method is unique to the USPS.

Grondoth posted:

I thought it was well established the only reason the Postal Service was having a rough time was because of the way congress said it had to handle retirement benefits, which is to pay them all up front. Or something equally as bad. The postal service should be doing fine.

Shimrra Jamaane posted:

Why on earth does the Postal Service even need to turn a profit? Let it run a huge defect, who cares, it performs a vital function in maintaing a stable society.

Shimrra Jamaane posted:

Why on earth does the Postal Service even need to turn a profit? Let it run a huge defect, who cares, it performs a vital function in maintaing a stable society.

Lief posted:

The postal service is necessary and should it run at a deficit so be it: This makes people's heads explode.

Amarkov posted:

Then again, maybe the Reagan thing is exactly the problem.

Moridin920 posted:

What is this retarded mentality of 'herp derp the government has to turn a profit and function like a business.'

In BASIC economics you learn that there are services and public goods that aren't profitable and that nobusiness wants to touch with a 10 foot pole, yet those goods/services are necessary for society to function. Thus, the government provides, at a cost. It's not supposed to be profitable you chucklefucks, if you can manage it in such a way that it is, great, but it isn't a requirement.

GAS CURES KIKES posted:

I understand it's all anecdotal and second hand, but I figured you might find it interesting none the less.

GAS CURES KIKES posted:

Pobama posted:

Now, I’m a huge fan of Fed-Ex. They do an excellent job. They make logistics look easy. Yet I am wary of ceding something “THE FOUNDERS” all praise be upon their very white names, found important enough to specially mention in the US Constitution. http://en.wikipedia.org/wiki/Postal_Clause

esquilax posted:

While the GOP might use the story as a political football when it makes the news, there is no plot to destroy the post office as some people are stating.

Amused to Death posted:

Taking down the post office has been a pet project of the GOP for quite a while, just as with SS and Medicare.

esquilax posted:

The first three responses to the thread all state that the funding requirements were pushed through by republicans to destroy the usps. The requirements were bipartisan and not controversial, which directly contradicts that. I think people are just relating a familiar narrative rather than looking at the facts of this particular case. I think you are doing the same thing right now, by trying to lump it in with Medicare and SS.

Amused to Death posted:

I'm not talking about that particular requirement they passed, I'm speaking in general. The USPS is the antithesis of everything the GOP preaches and they hate it, namely for its union and the fact the government is in fact providing a service the free market would fail miserably at doing yet they still circlejerk around the idea of privatizing part of the USPS. If I recall, I think their national platform specifically calls for it.

e: it does
http://news.yahoo.com/gop-platform-...-232404127.html

esquilax posted:

The postal accountability act that introduced the retiree medical funding requirements was completely bipartisan, passed by voice vote, and was cosponsored by two of the more progressive members of congress (iirc waxman was one of them). The only major difference is from how private companies do it is that the payments were scheduled to be amortized over 10 years instead of 20. The funding requirements didn't make them broke, it just allows us to recognize that they've always been broke. While the GOP might use the story as a political football when it makes the news, there is no plot to destroy the post office as some people are stating.

esquilax posted:

Then I suppose we agree. The GOP definitely uses the USPS as a political football and would like to privitize it. I definitely disagree with other posters who think that the GOP is playing 4 dimensional chess by passing legislation for the sole purpose of putting it in a bad financial position.

esquilax posted:

Then I suppose we agree. The GOP definitely uses the USPS as a political football and would like to privitize it. I definitely disagree with other posters who think that the GOP is playing 4 dimensional chess by passing legislation for the sole purpose of putting it in a bad financial position.

esquilax posted:

I wouldn't be surprised if it has a nugget of truth. In the past few years, unions have been very eager to cut benefits for younger union members to benefit older ones and maintain solvency in the short term.

Troy Queef posted:

The UK's considering a similar thing, and indeed there's a lot of the same sort of complaints coming up: expense, the Tories/GOP not realizing just how much it costs to run a full-service mail company (remember, FedEx and UPS are primarily based around parcel post with variable rates, not first-class letter service), and how the "last mile" will be impacted/rural service affected, as currently UPS at least, via SmartPost, can save money and cover more places by contracting the USPS to deliver certain packages, especially to non-densely populated areas.

In short, GOP: prepare for a ton of angry calls from rural constituents who you once thought would vote for you no matter what once they can't send their Christmas cards for anything less than $3.00 a letter because they're in rural Montana and that's not a profitable area.

Paul MaudDib posted:

Perhaps you would care to name some other Federal agencies or private businesses that are required to fund their retirees who aren't even born yet then?

It's mindblowing that you can look at an agency with that kind of a weight chained to its ankle and wonder why it can't swim. I realize that Republicans have been generous lately with soundbites explaining all their evil plans, but recently there seems to be this trend in D&D where some people just refuse to see the blindingly obvious motives unless said politician goes on Meet The Press and explains their evil plans while holding a white cat and twirling a moustache.

I mean, you're either trolling, making the worst, most pedantic posts or you're adorably naieve. You admit that it's in their platform, but somehow you immediately flop back to your idea that Republicans would never try to pass legislation that puts a government agency in a bad position in order to demonstrate how inefficient and inferior it is

No Wave posted:

How is amortizing over 10 years instead of 20 not significant? And the pre-funding is required for pension for the retirees of the next 75 years. It's insane. What company could possibly pay that? 75 years of pension benefits funded over 10 years?

Solkanar512 posted:

Are you kidding me? The unions around here are doing everything they can to fight that sort of short-sighted poo poo.

esquilax posted:

Privitize is not a synonym for undermine. There is a very big difference between treating the usps like a private company and passing bills to undermine its effectiveness. It is clear that the bill in question is not the latter, especially since is was bipartisan and not controversial.

quote:

Further, the requirement is not to fund the retiree health for future employees, it is to fund the accrued service of people who have actively been working. That is, if the usps closed down today, it would be the money needed to pay the benefits that they already owe.

Mechafunkzilla posted:

It's like saying the public school system is "losing money."

Buffer posted:

The post office is constitutionally mandated - Article I, Section 8, Clause 7. One of the only things implicitly laid out as being "a thing congress should do", so I suspect anyone who wants to kill it is going to have a real fight on their hands from the right.

quote:

Somewhere in the Netherlands a postwoman is in trouble. Bad health, snow and ice and a degree of chaos in her personal life have left her months behind on her deliveries. She rents a privatised ex-council flat with her partner and so many crates of mail have built up in the hallway that it’s getting hard to move around. Twice a week one of the private mail companies she works for, Selektmail, drops off three or four crates of letters, magazines and catalogues. She sorts and delivers the fresh crates but the winter backlog is tough to clear. She thinks her employers are getting suspicious. I counted 62 full mail crates stacked up in the hall when I visited recently. There was a narrow passageway between the wall of crates and her personal pile of stuff: banana boxes, a disused bead curtain, a mop bucket. One of the crates has crept into the study, where the postwoman’s computer rears up out of her own archival heaps of newspapers and magazines. Should these two streams of paper merge they would not be easily separated. The postwoman hasn’t given up. She had a similar problem with the other private mail company she works for, Sandd, a few years back. ‘When I began at Sandd in 2006 I delivered about 14 boxes of mail every time,’ she said. ‘I couldn’t cope and at Christmas 2006 I had about 90 of these boxes in the house. By New Year’s Day we had 97. There were even boxes in the toilet.’ The postwoman is paid a pittance to deliver corporate mail. She hasn’t done her job well, yet so few people have complained about missed deliveries that she hasn’t been found out.

Across the world, postal services are being altered like this: optimised to deliver the maximum amount of unwanted mail at the minimum cost to businesses. In the internet age private citizens are sending less mail than they used to, but that’s only part of the story of postal decline. The price of driving down the cost of bulk mailing for a handful of big organisations is being paid for by the replacement of decently paid postmen with casual labour and the erosion of daily deliveries.

I agreed not to name the Dutch postwoman or to give away any detail that would identify her. Even if she wasn’t sitting on months of undelivered mail Sandd or Selekt could sack her in a heartbeat. She works, she reckons, about 30 hours a week for the two companies, earning about five euros an hour, although the legal minimum wage in the Netherlands is between eight and nine euros an hour. She has no contract. She gets no sick pay, no pension and no health insurance. One of the companies gives her a dribble of holiday pay. Selekt gave her a jacket and a sweatshirt but she gets no other clothing or footwear and has to pay to maintain her own bike. The company is able to offer such miserable conditions because of loopholes in Dutch employment law.

The postwoman is paid a few cents for each item of mail she delivers. The private mail firms control their delivery people’s daily postbag to make sure they never earn more than €580 a month, the level at which the firms would be obliged to give them a fixed contract. Somehow Selekt has not noticed it is getting fewer empty crates back than it sends full crates out. When I followed the postwoman to the kitchen, I saw, like some recurring nightmare, 20 more crates filled with letters.

Paul MaudDib posted:

It's certainly not about "treating the USPS like a private business". Point me to one Fortune 500 company that is legally required to prepay its pension plan 75 years in advance. Go ahead, I'll wait.

quote:

It's almost like there's some kind of long-term goal of setting the USPS on the path to closing down inherent in this bill. I mean, it's in the platform of one of the two major parties in the US, but everyone knows the GOP platform is just a liberal conspiracy.

But since you seem to think that the money isn't designed to fund future employees, let's take a look at some actuarial tables. You know how old someone whose pension is going to end in 75 years is? According to Social Security, a male with an expected 75.38 years to live is age 0. They're literally newborn babies, less than six months old. A female is age 6, certainly not old enough to be a postal employee. You're claiming something that is blatantly, provably false.

Radbot posted:

I'm all for dismantling the USPS if only because it will primarily affect the backwards hicks in Bumfuck, MO that seem to dominate national political discourse.

Harry posted:

And pretty much every business ever.