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September 05, 2011

Is the US Postal Service Near an End … Another Casualty of Unions

Posted in: Business,Economy,Government,Jobs,USPS,WTF

“Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds” … but federal bureaucracy and Unions could certainly put an end to the US Postal Service.

The US Postal Service is near default and bankruptcy and because of decades of contractual promises made to unionized workers, including no-layoff clauses that  are increasing the post office’s costs. Who runs a business like this? The Postal Service has been a colossal disaster for years.  Add to this the fact that Postal workers receive better benefits than other federal workers. Why? The US Postal Service should not be bailed out by Congress unless they are made to do many cost containing measures like reducing services, laying off unnecessary workers, and closing locations.

The United States Postal Service has long lived on the financial edge, but it has never been as close to the precipice as it is today: the agency is so low on cash that it will 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 — despite a no-layoffs clause in the unions’ contracts.

The Astute Blogger has further commentary on the reasons why the US Postal Service is about to go belly up. The US Postal Service is a dinosaur and must either adapt to today’s high tech environment or go the way of the Dodo.   We cannot continue to have a government subsidized entity like the PO when private enterprise could handle it for much less. The American Thinker is correct, the USPS has been the model of inefficiency. They are the poster child of a failed business model. It does not matter how many times they increase the cost of stamps or receive government bail outs, they continually will ask for more. The days of past union contracts are over. Make this into a quasi business, sell off certain aspects of the business, for God sakes do something that makes it not such a burden on American tax payers.

Look for a gigantic tax payer bailout with little change to the union contract. Senate Dems would filibuster any tampering with the contract so it will almost certainly survive with a few cosmetic changes.

And 5 years down the road – maybe sooner – we’ll be asked to bail them out again.

EXIT QUESTION: Who really used to USPS these days? In the age of the Internet and on-line banking, does anyone really get snail mail? Mostly junk mail is sent through the US mail which in the Internet world would be considered spam.

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