Thinking Outside the Postal Box
By Larry Riggs
Not only is the U.S. Postal Service overburdened with pension expenses from former workers, now we hear that Royal Mail is going broke from them as well and may be forced to sell a substantial stake to TNT in order to stay afloat.
In a report that was slated to come out Wednesday, Richard Hooper, the U.K.’s former telecommunications regulator, said the Royal Mail monopoly needed further heavy investment in automation, but is hobbled by a pension deficit that has doubled to 7 billion pounds ($11 billion) in the past three years.
Keep in mind that all European postal services are set to fully privatize in the next few years, supposedly keeping universal service.
[It’s worth noting that one of the privatized success stories, Deutsche Post, the German post office, is parent company to parcel shipper DHL which a few weeks ago said it was pulling out of The U.S. because it couldn’t make enough money].
So much for universal service.
Before the announcement of talks with TNT, reports suggested that one possible way to keep the U.K.’s postal system going in these impoverished times would involve having the British government pay the pensions of its retired workers. Sound familiar?
Closer to home, before the passage of the 2006 Postal Accountability and Enhancement Act, many mailer groups repeatedly called for the U.S. Treasury to pick up the tab for the pensions of former postal workers and free up USPS funds for postal purposes.
That didn’t really happen.
In fact, the USPS still has to pay as much as $5.8 billion a year in employee retirement costs and Reps. John McHugh and Danny Davis—two key figures in the marathon postal reform fight—are set to introduce legislation to give the USPS a financial break.
All this begs the question about who’s gonna pay to ensure that workers who spent their lives delivering the mail and keeping the country together will be able to spend the ends of their lives in relative comfort and security.
The money has to come from somewhere.
Maybe it’s time for somebody in government to think a little outside the box and realize you can’t make money on everything—that you must provide essential services.
Mass transit is a good example. The Wall Street firms crying for their bailouts recently couldn’t stay in business without a money-losing New York City subway system to bring their employees to work every day.
And the intense dislocations of World War II kind of forced the US government to implement the costly GI Bill to get the country back on its footing.
It’s been argued that the GI bill may not have happened without the perceived threat of domination from the now-defunct Soviet Union and the all-too-real memory of the Great Depression.
But the GI bill did help lead America to decades of prosperity and growth.
Of course, if anybody had the guts to propose anything like this, they would be barraged 24/7 with tired familiar rhetoric about cost, cost, cost.
Maybe now it’s time for someone in government to wise up and show some gratitude for those who’ve kept the system running day in and day out.
This might just be smart business in the long run.
December 17th, 2008 at 3:55 pm
I would have a bit more gratitude to the retired US postal employees if they didn’t have a retirement plan more generous than is avaialble to almost anyone in the private sector. Postal employees retire younger and on a larger percentage of their working pay than almost anyone in the “real” economy. Moreover, they go out on disability at a rate higher than workers in almost any other industry - including mining and heavy consrtuction.
I make my living off of direct mail, but am opposed to passing their bloated costs off onto the general taxpayers. They need to improve their productivity.
December 22nd, 2008 at 7:56 am
Jim Tanner, with all due respect your gratitude and feelings of comparision to the private sector don’t add up and don’t help the problem.
The postal service is government and not private sector.
As such there is no debate. The us government is directly responsible for all the cost associated with the retirement plans pure and simple.
When comparing an agency like the us postal service to the other government agencies you will find that no other government agency funds their employees retirement plans.
The allocation place upon the postal service to pay money into the retirement plan was done with the intent to pass along another hidden tax upon the public (albeit a stamp tax) as its cost artifically is past along to the stamp purchaser.
Taking the funding requirement will relieve the american public of paying additional postage for something that should be paid for in direct taxes by the government.
Postal retirement issues are no different no separate from the rest of the us government for which they should be addressed the same fashion and manner.
Retirement age, and disabilities are other subject that can be addressed and only be addressed by the government addressing the entire retirement plan as the same rules and issues pertain to the entire us government.
In the 2005 postal reform bill congress treated the postal service differently in requiring a postal emplyee to use their own annual, sick, or leave without pay for the first three days of an injury. The us postal service is the only agency of the us government this applies to.
The us postal service was attacked with antharx and several employee were sickened and later died. If any similar incidents happen again, an employee can be sitting or lying in a hospital bed dying the most horrible death and be burdened with using their own vacation time or leave without pay for the first three days.
If I as an employee am run over by a fork lift truck on the job, while in the hospital I am required to use my vacation time or leave without pay.
If there is an explosion in the post office, I in the hospital will have to use my vacation time or leave without pay.
The point I am making is every time that congress trys to address perceived problems from the private sector point of view they totally screw them up.
If we are talking about government retirement issues that effect the entire government then the whole plan should be addressed and changes made uniformaly.
If we are talking about on the job injuries then all agencies injuries should be address and actions taken uniformly.
December 22nd, 2008 at 9:24 am
In all due respect, Mr. Tanner what age are postal workers usually retiring. President Ronald Reagan changed the retirement system after 1984 and reduced not just postal retirees but all federal retirees. What percentage are you referring to? What percentage does the private system usually get for retirement? You need to have specific info in order to judge your comments fairly.
December 22nd, 2008 at 11:29 am
I exited the Postal service 6 year’s ago. I left early due to some excellent real estate investing. I sold when you dummies were buying. now I am buying the same properties you dummies are selling at fire sale price. With cash because I am rich. WE used to have work to do at the P.O. I worked both sides. The problem is not enough work to go around anymore. I do everything I can to avoid doing business in the PO and have not been in one since I left. This is a reality for you.
Raise rates again and many more will have the same attitude. Think out of the box and get the hell out of there if you can. IF not please work more efficiently so I will still have a pension when I turn 65. I dont need it but it’s my right to get one because we actually had work to do in the old day’s,, Lovin life. g
December 22nd, 2008 at 11:39 pm
If the Postal Service would convert the city carriers to a system similar to the rural routes we could save millions; reduce the management staff and avoid grievances.
December 24th, 2008 at 7:53 am
In response to Kukini Vrededburg, I am a City Letter Carrier for the US Postal Service and I disagree. I work in a station where we have both city and rural routes, and we have the same number of supervisors, 1 for each craft. We have grievances because of management’s contract violations. As for us becoming rural carriers, fahget about it! They wish they had the Union Contract we enjoy!
December 27th, 2008 at 12:09 pm
Over the 22 years i delivered mail as a city carrier, i paid into my retirement plan and paid fica and ss taxes. I also invested in the thrift saving, and by monitoring my investments I retired with $250,000 which now I am paying income tax on every year I use the money.