Business at the Postal Service should be booming. It is dying instead. Why? Intentionally short-sighted planning, bills quietly passed in the House without any record, and a shady, long-term forfeit to private industry. Parties aside, Congress is quietly helping to kill a working institution, solely for ideological reasons. And remember: The USPS doesn’t cost taxpayers a penny.
Byon November 4, 2014
Last November, Postmaster General Patrick Donahoe reported that the USPS had lost $15.9 billion for the year. That 70 percent of those losses were a result of a law introduced by Congress in 2006—the postal accountability and enhancement act (PAEA)—was left unsaid. The PAEA requires the postal service to prefund $5.5 billion a year for employee retirement benefits for the next 75 years—a political move that has been sucking funds from what would be an otherwise profitable business, and a long-term plan to hand shipping entirely over to less efficient, more expensive private enterprise.
Basically, the PAEA is a long-term forfeit of the United States Postal Service. This bill was passed on a voice vote, so there is no record of who voted for or against the bill. It was co-sponsored by two Democrats (Henry Waxman and Danny Davis) and a Republican (John McHugh).
If run with proper oversight, the USPS should be thriving. USPS package sales have grown by 20 percent over the past five years. With a drop in shipping rates back in September, retailers are switching services from its competitors, UPS and Fedex, which charge for fuel and distance. Although these price cuts don’t directly serve customers, many online purchases have free shipping because of it. So the Postal Service is not outdated because of the Internet, as some media outlets have reported. It is, instead, actively transitioning into the realm of e-commerce and could beat out private companies.
But then there’s that pesky PAEA. The Post Office—which, contrary to popular belief, does not receive taxpayer money—has been compensating for this burden by closing many of its facilities at the expense of its promise to American citizens.
In the last decade, we’ve seen the total number of mail processing centers cut nearly in half, down from 600 to around 300. And now it’s happening again.
Next January, the USPS plans to close up to 82 more. But this time it’s different. The closures will have the same local impact as always—loss of jobs, delays in service—but this time, even if you don’t live near one of the closing facilities, you will no longer be able to send most first-class mail overnight.
Lower standards will ultimately allow the processing facility consolidation to save the USPS a projected $750 million, but the impact on mail users has not been properly evaluated. The USPS Inspector General released a report last month stating the agency did not complete the updated impact studies required for any of the 95 facilities that will absorb the workload of those being closed. As it stands, the closures are based on data from 2011.
Will workers in these 95 facilities be required to work longer hours and deliver mail later in the day? Will customer service suffer? These questions remain unanswered, all because of a failure to complete paperwork.
“You can’t kill a popular, needed public entity unless you drive people away from it,” American Postal Workers Union President, Mark Dimondstein says. “Part of doing that is to undermine and degrade the services on the path of dismantling what belongs to all of us. That’s what’s happening with these service standard changes and plant closings.”
If driving customers away is part of the Postal Service’s plan, here’s the rest of it: First, they’ll continue closing processing plants. Next, they’ll look to retail partnerships like we saw first with Sears (way back in 1988) and most recently with the controversial plan to sell stamps at Staples.
These closings come during ongoing protests against a pilot program launched last fall which would have Staples sell stamps and other shipping goods on nights and weekends in 82 stores nationwide. It was a way for the USPS to determine if lower costs could be realized with retail partner labor instead of the labor traditionally associated with retail windows at the Post Office. If successful, the program would spread to 1,500 stores.
The American Postal Workers Union has been campaigning against this retail option for months and just about every labor union in the country (AFLCIO, AFSCME, SEIU, AFGE, CWA) has joined them in boycotting Staples in defense of postal employees jobs. In July, the American Federation of Teachers, which represents 1.6 million members, joined thousands in boycotting Staples. Days later, the USPS announced that the pilot program to have “mini post offices” in Staples would end.
“Staples won’t be replacing the post office anytime soon,” wrote Jillian Berman of the Huffington Post.
The pilot ended, but the business relationship between Staples and the USPS did not: Staples will continue to sell USPS products. The program now has a new name.
“Staples has discontinued its pilot program with the U.S. Postal Service,” Director of Public Relations for Staples, Inc, Carrie McElwee wrote in an email statement. “The 82 pilot stores were transitioned to the Postal Service’s Approved Shipper Program.”
The Approved Shipper Program, which began back in 2005, is available at 6,000 retail outlets across the country. As of Monday, Staples has close to 100 participating stores—18 more stores than in the pilot program. Staples did not provide comment on its plans for expansion.
“[The relationship with Staples] helps secure the long-term future of the Postal Service,” USPS Sr. Public Relations Representative, Darleen Reid, wrote in an email to. “Partnerships like the one with Staples enables the Postal Service to generate additional revenue and additional work for our employees, while also generating additional customers for Staples and for other expanded access partners.”
The logic here is off. If Staples sells stamps during more convenient hours, sold by untrained, low-wage employees, how will that “generate additional work” for its current employees? If the USPS’s private retail partners go downhill, the Post Office will not have a future—not even in name.
“If they open an approved shipper in a Staples a mile away from a Post Office and then close the Post Office at 4 p.m. and say, ‘Go buy your stamps at Staples,’ that’s a transfer of living-wage, unionized labor to low-wage workers,” Dimondstein says.
The Postal Service needs a hero and it’s not Batman, or his new collectors’ edition stamps. The Postal Service needs an idea like the one made by the The USPS Office of Inspector General. The plan, championed by Sen. Elizabeth Warren back in February, says the USPS should partner with banks instead of private retailers.
The USPS would allow the 68 million Americans without access to financial services—ones who have to resort to predatory payday loans and check cashing businesses, which pocketed $89 billion in 2012 on interest and fees—to cash checks at the Post Office. The USPS would profit an estimated $9 billion while bringing fair financial services to “bank deserts” all over the country,
It would help eliminate the predatory check cashing business that John Oliver outlined in one of his first HBO shows. It’s a segment—and an idea—that made so much sense, it helped rocket him to stardom.
Union demonstrations continue outside of Staples stores all over the country, from Northern California to Georgia to Massachusetts to Philly to New York City. They’re protesting because they know it doesn’t have to be this way—that the Postal Service can make money without the closures and the job cuts. On principle, some in the government do not want it to, so it won’t.