The Post Office lost $1.9 billion over the last six months. No salaries were cut. No retirement benefits were cut. No health care benefits were cut. No retiree health care benefits were cut. It was business as usual with none of the hugely expensive employee benefits being cut. See the Postal Service report here.
There was a reduction in full time employees because the retirement benefits are so good, why keep working? Nevertheless, excess employees with little work to do, still linger on the payrolls – in spite of billions of dollars of losses.
How long will it take for Congress to allow Saturday deliveries to fade away? We don’t know the date, but this will occur when the political risk for continuing to fund Postal Service losses is greater than the political risk of shutting down Saturday deliveries.
The amount of money that can be saved by dropping Saturday deliveries and “reworking prepayment of retiree health benefits” is enormous. Imagine how much would be saved if postal workers received average benefit packages, with less vacation, limited retirement, and no “special” retirement health care benefits.
Potter reinforced the need for legislative and regulatory changes necessary to maintain a viable Postal Service. Two of those changes could save the Postal Service more than $8.5 billion in the first full year they are implemented: restructuring the prepayment of retiree health benefit payments and eliminating one day of delivery service per week.
This special “kingly” treatment of government employees depresses private business growth and reduces employment in the private sector. If postal costs had been reduced (cutting Saturday deliveries and employee benefits) 5-10 years ago, and postage rates stabilized, then it is guaranteed that much more print advertising would have resulted. More paper, print, etc, would have been consumed, and many more jobs would have been saved in these and related support industries. Sure, paper would still be in decline, but the the decline would have been more moderate, and controllable. Such cost control would have also slowed the decline of the Postal Service as well.
Eventually, there will be no Saturday deliveries…and then no Thurday… and then no Tuesday. As the Post Office CFO points out:
“Despite aggressive efforts to reduce costs, including the reduction in full-time equivalent employees by more than 120,000 since 2008, we are still experiencing unsustainable losses,” said Corbett. “Quite simply, the business model is broken and laws, regulations and contracts must be changed to provide commercial operating flexibility needed for financial stability.”