Sep 7, 2011

The Postman's Dillema

The United States Postal Service has been living on a financial edge, but now they might 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. “Our situation is extremely serious,” the postmaster general, Patrick R. Donahoe, said in an interview. “If Congress doesn’t act, we will default.”

In recent weeks, Mr. Donahoe has been pushing a series of painful cost-cutting measures to erase the agency’s deficit, which will reach $9.2 billion this fiscal year. They include eliminating Saturday mail delivery, closing up to 3,700 postal locations and laying off 120,000 workers, nearly one-fifth of the agency’s work force. The post office’s problems stem from one hard reality: it is getting squeezed on both revenue and costs. Mostly because the Federal Government demands that it keep locations open that would otherwise be completely unprofitable or unfeasible.

Since you're reading this on a glowing screen and not a letter you already know why they're in as much trouble as the Telegraph operator and the typewriter repair man.

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.

Missing the $5.5 billion payment due on Sept. 30, intended to finance retirees’ future health care, won’t cause immediate disaster. But sometime early next year, the agency will run out of money to pay its employees and gas up its trucks, officials warn, forcing it to stop delivering the roughly three billion pieces of mail it handles weekly.

Now, allow me to offer a solution to their mess so that all these postal workers don't end up on a soup line: Everyone go out, buy a handful of stamps, and mail your mother and grandmother a letter. What's that? You forgot how? Maybe your letter carrier can help you with it?

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