Postal Service Pushing Massive Wage and Benefit Cuts

Under pressure to cut costs and unable to cut services, the workers are the likely victims.

high-resolution photo of post, road, street, spring, green, letter, color, communication, blue, box, mailbox, mail, art, mailboxes, message, postal, letters, postbox, shape, contact, letterbox, postage, mailing, correspondence, urban area, e mail
Image CC0 Public Domain

For generations, working for the post office was aspirational—the very symbol of stable, middle-class employment. Those days will be over if Congress and Postal Service leadership get their way.

The U.S. Postal Service, facing pressure from Congress to propose initiatives to ensure the agency’s long-term viability, is floating a business plan that would include significant cuts to employees’ take-home pay and benefits.

USPS included a hike to the employee contribution level for pensions in a first draft of a 10-year business plan presented to lawmakers and stakeholders, according to multiple people who were briefed on it, as well as phasing out pensions altogether for new hires in favor of a defined-contribution system only. The Postal Service is looking to cut the amount of paid time off employees receive by merging annual and sick leave and pitched a popular proposal with demonstrated bipartisan backing to require all postal retirees to enroll in Medicare as their primary insurance provider.

The mailing agency suggested it resume closures of mail processing plants, according to those briefed by management, a controversial practice it has used to reduce its vast physical footprint and shed workers. USPS stopped closing the facilities amid congressional pushback and intensifying talks for a legislative overhaul to the agency. Last year, the Postal Service inspector general found the agency realized just 5% of its projected savings from the consolidation plan.

USPS told those briefed on its plan that it was still subject to change. At a hearing in April, lawmakers grilled Postmaster General Megan Brennan on why the agency had failed to produce a 10-year business plan and indicated they would not move forward on legislative reforms USPS has said it desperately needs without first viewing the document. The details of the business plan were first reported by HuffPost.

Rep. Elijah Cummings, D-Md., who chairs the House Oversight and Reform Committee and helped usher an overhaul bill through the panel in the last Congress, said he planned to set a July deadline for the business plan and Brennan promised to meet it.

The Postal Service also discussed at its meetings a controversial proposal to end Saturday mail delivery. Brennan conceded at the April hearing that the plan will include a proposal to reduce mail delivery to five days per week, rather than the current six-day requirement. Rep. Mark Meadows, R-N.C., told the postmaster general to “quit wasting our time,” noting Congress has repeatedly blocked any effort to cut delivery frequency.

USPS also told stakeholders it would look to further cut hours at post offices and continue to build its cadre of non-career employees who earn less pay and fewer benefits. The agency’s non-career staff grew more than 60% between fiscal years 2010 and 2017.

—-Government Executive, “Postal Service Floats Big Cuts to Employee Pay, Leave and Benefits

Traditional pensions, alas, have become rare outside the government sector. Only 13 percent of private-sector workers were enrolled in a pension plan last year, compared to 77 percent of state and local government workers. (There are no statistics for federal employees, oddly, but most of us are eligible for a small pension in addition to a defined contribution plan.) So it’s not surprising that, under pressure from Congress to prune costs, the Postal Service leadership is following suit. Retirement benefits are expensive.

Ditto the move towards temporary and part-time help. They’re simply cheaper to employ, since they often get no benefits at all and tend not to accrue seniority and the higher wages that come with it.

Still, the US Postal Service isn’t a private business. It’s an executive agency of the United States Government. Unlike its private-sector competitors like UPS and FedEx, it’s mandated by Congress to deliver first-class mail anywhere in the country at a fixed rate and, as noted in the report, lacks the freedom to cut costs by eliminating unprofitable services like Saturday delivery. It’s absurd to expect them to operate on a break-even basis given those constraints.

Beyond that, while I suppose there’s an argument that those employed by the taxpayers shouldn’t receive pay and benefits that are wildly out of line with those most taxpayers themselves enjoy, neither should the government lead the race to the bottom that’s destroyed the middle class. The bargain for government workers, whether at the federal, state, or local level, has always been stable, decent work with a comfortable retirement in exchange for a career of service. The Great Recession greatly eroded that for a lot of states and localities. The political class seems poised to do it at the federal level going forward.

FILED UNDER: Economics and Business, Government
James Joyner
About James Joyner
James Joyner is a Security Studies professor at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. OzarkHillbilly says:

    The GOP war on a competent and functioning government claims another victim.

    11
    1
  2. Bill says:

    The post office is busted in more ways than one. Just two weeks ago I ordered something through Amazon. Because I’m Prime, I get next day delivery.

    I made a mistake. Just recently I moved and when placing my order I didn’t make sure my order was sent to my new address.

    So my package had to be forwarded. I moved within Palm Beach County and barely 3 miles from my past address.

    How long did my forwarded mail take to get delivered to my address? 14 days and not before the package spent over a week going to Jacksonville Florida 300 miles away from where I live.

    The PO has been doing this lunacy with forwarded mail for 30+ years. I had similar experiences in the 80’s but the USPS had a better excuse then. I moved from Florida to Maryland, MD to Illinois, IL to California etc etc while serving in the Navy.

    3
    41
  3. wr says:

    @Bill: So to recap, you ordered a product and had it shipped to the wrong address, and it’s the Post Office’s fault it didn’t just magically arrive at your doorstep.

    Let me guess: You voted for Trump.

    62
    12
  4. SKI says:

    One very important fact that often gets ignored when discussing the Post Office and their financial condition: Congress mandates that USPS PREFUNDS its entire pension obligation. That is something no one else in the country does. It is insane.

    Congress, Not Amazon, Messed Up the Post Office

    Then there is the Postal Accountability and Enhancement Act of 2006 (PAEA), which some have taken to calling “the most insane law” ever passed by Congress. The law requires the Postal Service, which receives no taxpayer subsidies, to prefund its retirees’ health benefits up to the year 2056. This is a $5 billion per year cost; it is a requirement that no other entity, private or public, has to make. If that doesn’t meet the definition of insanity, I don’t know what does. Without this obligation, the Post Office actually turns a profit.

    And from the USPS OIG: Be Careful What You Assume

    What if your credit card company told you: “You will charge a million dollars on your credit card during your life; please enclose the million dollars in your next bill payment. It’s the responsible thing to do.” Doesn’t seem quite right, does it?

    Well, that’s what the U.S. Postal Service’s requirement to prefund its long-term pension and healthcare liabilities is like. The Postal Service is required to pay the full estimate of its liabilities, currently estimated at nearly $404 billion, even as that estimate moves around and is based on assumptions that are highly uncertain and can frequently change over the life of the liability.

    27
  5. @OzarkHillbilly:

    USPS is not funded by the government. Under its charter, it is supposed to be self-sustaining.

    (Seriously? Three down votes for stating a fact that is set forth in the article the OP links to?

    15
    8
  6. Bill says:

    @wr:

    So to recap, you ordered a product and had it shipped to the wrong address, and it’s the Post Office’s fault it didn’t just magically arrive at your doorstep. Let me guess: You voted for Trump.

    Wr, You are an absolute idiot. Where in my post did I blame the Post Office for my mishap? Find the words and get back to me either that or STFU. I was telling how badly the PO is run.

    And the idiot who upvoted your stupid bullshit has to be as big a moron as you.

    5
    41
  7. mattbernius says:

    @Bill: no offense but I am having a lot of cognitive dissonance with:

    Where in my post did I blame the Post Office for my mishap?

    And

    I was telling how badly the PO is run.

    While you might not blame them for the initial mistake you are holding them at fault for its slow resolution for said mishap.

    26
  8. Bill says:

    @mattbernius:

    While you might not blame them for the initial mistake you are holding them at fault for its slow resolution for said mishap.

    And you don’t get it either. I said the PO has been doing this for years. I’ve complained about this BS for years. Not just one single time.

    I hold the PO at fault for their incompetence, just like I held many people or organizations (Like one State Lottery spending over one million dollars to contest a $5 winning ticket) back in my old blogging days. The forwarding of any person’s mail inside one county shouldn’t take two weeks.

    And for those idiots out there, I didn’t vote for Trump and have that here multiple times. Some commenters here think a dissenting opinion automatically means a Trump supporter. Any intelligent person would know that’s bullshit.

    2
    19
  9. Kit says:

    The Great Recession greatly eroded that for a lot of states and localities. The political class seems poised to do it at the federal level going forward.

    Not the political class, but rather the gilded class. These parasites are determined to destroy their host as soon as possible. Are they short sighted, or do they feel there is no future?

  10. Kathy says:

    @wr:

    A few years ago we had to send some documents to a client out of town. We used a local courier company. We made a mistake with the label, and we put our address as the destination rather than the return address (it happens). We then took the envelope to an office of this company located about a mile from our offices.

    We got it back the next day. That’s when we realized our error and corrected it. but I was curious, so I looked up the tracking history online. Sure enough, it was sent from the nearby office to a central processing location, then to a regional distribution center, then shipped to us.

    That’s how courier companies work. It may seem inefficient, and piecemeal it may even be, but at the massive scales these companies handle it is very efficient.

    14
  11. DrDaveT says:

    @Doug Mataconis:

    USPS is not funded by the government. Under its charter, it is supposed to be self-sustaining.

    You do recognize how insane that is, right? That they don’t get to adjust what services they provide, and cannot set their prices to cover costs, but are supposed to be self-sustaining?

    The fact that their charter is impossible to satisfy is not the fault of the USPS. Either let them operate like a private business, or regulate them as a public utility (including allowing them to turn a reasonable profit), or suck it up and provide mail service as a taxpayer-funded infrastructure benefit, like highways and defense.

    22
    1
  12. @DrDaveT:

    Which is why I support the idea of cutting the last ties between the Federal Government and USPS and privatizing the mail, as has been done in Germany, Japan, Portugal, and the United Kingdom.

    6
    20
  13. michael reynolds says:

    I’ve had great experiences with USPS. I’m sort of mid-move and my new mail lady has accommodated me without being asked, holding stuff when she knew I wasn’t here, bringing it when I was. They have a service that sends me a daily email showing what mail is being forwarded. On the exceedingly rare occasions when I’ve had to go into a PO the service has been at least on a par with the UPS store.

    Contrast that with Amazon’s gig-worker delivery which throws packages randomly, never bothers to ring the bell, no concern for theft, just random Uber drivers wandering around my property at odd times deciding where to drop my package.

    The fact is the PO works. That’s exactly why Republicans hate it.

    And when it’s gone who will deliver to Pigsnout, Arkansas and Buttplug, North Dakota? I thought Republicans cared about the goobers.

    28
  14. OzarkHillbilly says:

    @Doug Mataconis: So? I know this. What does that have to do with what I said? You know as well as I that this is a wholly manufactured crises of the Republican congress as @SKI: explains. This is a prime example of exactly what I am talking about.

    9
    1
  15. Gustopher says:

    Traditional pensions, alas, have become rare outside the government sector. Only 13 percent of private-sector workers were enrolled in a pension plan last year, compared to 77 percent of state and local government workers.

    Given how many pension plans are underfunded, and how the first thing businesses do when they go bankrupt is screw the pensioners, I wonder whether the decline in traditional pensions is such a bad thing.

    Is a known and predictable lesser value better or worse than a good chance of being completely fucked over? Do you trust your employer to still be in business when you retire?

    The fact that the Post Office — which operates with the full faith and credit of the US government — is the only organization that has to pre-fund their pension is insane.

    11
  16. MarkedMan says:

    It is a stereotype to assume that all Trump voters are angry misanthropes who blame everyone else for their self inflicted problems and when challenged lash out in a juvenile and offensive way. We should try to avoid assuming stereotypes are always true. But when you have someone like Bill who so perfectly promotes the stereotype, it’s just so hard to avoid coming to the conclusion that he voted for Trump.

    On the other hand, it’s like the famous island of knights and knaves, where the knights always tell the truth and the knaves always lie. The fact that someone tells you they are a knight doesn’t actually mean anything in that context. Similarly, someone saying they didn’t vote for Trump doesn’t really prove the case either way.

    3
    2
  17. MarkedMan says:

    @Kathy: @Doug Mataconis: In my lifetime the Republican / Libertarian solution to all problems has been privatize, privatize, privatize. I’ve lived in enough different places to see this play out. What happens is, first, all the workers lose their pensions, their health benefits and take a reduction in salary. Then there is a mad rush of competing companies and you have to sort through them to find one that will say, pick the trash up in your neighborhood. Then you have to pay them separately. I suppose, in theory, your taxes could go down because the municipality doesn’t have this expense anymore, but I’ve never seen it. Then, these companies regularly mess up because they underbid in an effort to get customers and they treat their workers like sh*t so they have an incredible turnover and finally, they incredible stupidity of having 5-6 garbage trucks collecting in the same neighborhood takes its toll and one day you call to complain that your garbage hasn’t picked up and no one answers the phone because they’ve gone bankrupt. So you have to find another company while your garbage stinks in the July heat, and the new company take a few tries to get you correctly on their pickup schedule. Repeat a few more times until every company has gone under except one and they can jack their prices up however much they want.

    Thank you, F*ing Libertarians, whose naive view of the market trumps reality every time.

    16
    3
  18. OzarkHillbilly says:

    @Gustopher: I trust my union (Carpenters) to administer my pension. But admittedly construction is way different. I spent most of my career as a gypsy, working for this contractor for a year, that one for 2 weeks, the other for 8 months. All buildings eventually get built. I never had a job that I wasn’t working myself out of. Not at all uncommon for me to have 4 to 6 W-2s at tax time.

  19. OzarkHillbilly says:

    @MarkedMan:

    It is a stereotype to assume that all Trump voters are angry misanthropes who blame everyone else for their self inflicted problems

    I think that goes for people on both sides, but the ones on the right want to blame the govt while the ones on the left want to blame bad luck or some such.

    In my (much greater than most) experience the Postal Service is extremely reliable.

  20. MarkedMan says:

    @OzarkHillbilly: I agree on my mostly positive experience of the post office. And such a deal! A few coins to deliver a letter and you can leave it in your mailbox for the carrier to pickup. Contrast that with driving to a FedEx store (because you are just a regular person and don’t have a scheduled pickup time every day), waiting in line, and paying 15 bucks to send the same thing.

  21. An Interested Party says:

    Some commenters here think a dissenting opinion automatically means a Trump supporter.

    Not really, but the cognitive dissonance is definitely a sign of what many Trump supporters suffer from…

    2
    3
  22. Kathy says:

    @MarkedMan:

    I don’t recall saying anything about privatizing any company or service.

  23. DrDaveT says:

    @Doug Mataconis:

    Which is why I support the idea of cutting the last ties between the Federal Government and USPS and privatizing the mail, as has been done in Germany, Japan, Portugal, and the United Kingdom.

    How is paying monopoly profits (or, worse yet, having 7 competing mail carriers in any given area, but none in the countryside) more efficient than a nonprofit agency? You’re talking about taking cable TV as your business model here…

  24. MarkedMan says:

    @Kathy: Sorry, I linked to both your post and Doug’s, but only meant to respond to him on that comment.

  25. MarkedMan says:

    @MarkedMan: But in a Truly Free Country! [TM] you can’t collectively decide how to deliver mail across the territories. And it will cost so much less if a private industry does it. You know, like how much less it costs to send something UPS or FedEx or DHL! FreedoM!

    1
    1
  26. wr says:

    @Bill: “You are an absolute idiot. Where in my post did I blame the Post Office for my mishap? Find the words and get back to me either that or STFU. I was telling how badly the PO is run.”

    So to recap: You were relating an unpleasant occurrence you feel the PO caused, you were using it to tell us how badly the PO is run, but I am an idiot because I said you were blaming the PO.

    I think I was wrong when I said you were a Trump voter. I doubt you could read that many letters on a ballot.

    3
    1
  27. Just nutha ignint cracker says:

    For generations, working for the post office was aspirational—the very symbol of stable, middle-class employment.

    It still is. The difference is that now the middle class is what we called “the working poor” when I was in high school 50 years ago. On the other hand:

    neither should the government lead the race to the bottom that’s destroyed the middle class

    shows that you’re finally starting to get it (at least for this post).

  28. michilines says:

    Doug you are making a distinction without a difference. While some my see the USPS as somewhat independent from the government, the GOP knows that if they cripple the USPS, what you want to happen will happen and it will be another victory for privatizing a government function that was actually working until the GOP decided to cripple it.

    It’s been going on forever on every front. The GOP wants to privatize every aspect of government. Just look at the military. Privatization of so many aspects of the military has made it much more expensive. Those contractors have to make a profit. Also look at education. The GOP and conservatives are trying their damnedest to make all education a for profit industry.

    As we all know, the drive to make a profit doesn’t always result in the best for kids, the military, patients or the taxpayer. Why is it that everything has to make money for someone who sits on his ass and sucks up to the shareholders?

    As so many others have pointed out, there’s no profit in parts of these privatization moves by the GOP, so someone is going to lose out. I guess it’s okay with you if it is someone else and not you. There’s a huge difference between the U.S. and the other countries you pointed to about privatizing mail delivery. I’m sure you know what that difference is.

  29. An Interested Party says:

    …the GOP knows that if they cripple the USPS, what you want to happen will happen and it will be another victory for privatizing a government function that was actually working until the GOP decided to cripple it.

    It’s sad that many more people don’t realize the con game that’s going on here…if the Democratic Party could do anything, it should be to point out what the GOP has been doing for the past few decades…when you even have a conservative like James Joyner realizing how the middle class is being destroyed, it shouldn’t be that difficult to craft a message, although I guess it doesn’t help when you have libertarians spreading their childish dreams of privatization…

  30. Gustopher says:

    @OzarkHillbilly: Union run pensions tend to have a better track record. They are still sometimes underfunded, but there is a whole lot less risk of it being gutted during bankruptcy to pay of more “important” creditors, or all the assets of the company being sold off leaving only the pension and debts behind.

    And then there are the states… After various states have begun cutting pensions for their retired employees, I really haven’t understood why that doesn’t result in an immediate strike.

  31. Donnie says:

    @Bill: Well Bill sounds like you are to blame for you displeasure in the postal services. Since it generally takes 10 to 14 days for a change of address goes through. So a smart person would generally be responsible enough to atleast change their address on what ever little website they ordering from.
    So how about sucking it up buddy dont be a troll.

  32. Lee says:

    @Bill: UPS would have charged you to forward the package. First Class and Priority mail are forwarded for free!

  33. Jennifer Fisher says:

    @Doug Mataconis: The USPS is not funded by taxpayers. It receives no tax dollars. However, your mail and mail delivery is protected by law. Privatize and your protection vanishes. Private companies have the right to open inspect and record what you buy, order, and send. We at the USPS break our backs to get you your dog food, your “intimate objects”, your medicines, your bills, your dmv and voter registration, and checks. Your carrier knows how you vote, what you drive, if you pay your bills on time, or have just had surgery. And it is private. We are sworn to uphold and protect this. Prepare to lose that.

    13
  34. @Jennifer Fisher:

    Your assertion quite simply does not comport with reality in the nations where mail delivery has already been privatized. Why do you think the situation would be any different in the United States?

    In any case, for me the USPS is basically obsolete. I rarely actually mail anything anymore and days can go by when I don’t receive anything other than junk mail, which immediately gets thrown away. My banking is done online. My primary means of communication is email or other forms of online communication. And if I need to get a package delivered or something shipped over night Federal Express and UPS are far more convenient to use than the USPS, especially given the (lack of ) customer service I recieve on those rare occasions that I have had to visit a Post Office recently. There are a lot of people out there like me, and there are more of us coming and there’s nothing USPS or Congress can do to stop it. Eventually, USPS is going to be almost completely obsolete.

    11
  35. @DrDaveT:

    There would not be a monopoly because privatization would also include allowing competition in the delivery of 1st class mail and other forms of mail on which USPS still has a legally mandated monopoly.

  36. Mister Bluster says:

    @Jennifer Fisher:..Your carrier knows how you vote,..

    How do USPS employees know how I vote?

    1
    1
  37. Matt says:

    @Doug Mataconis: Interesting. In the last week I’ve gotten four shipments via USPS. Amazon prime has been shipping to me next day via USPS lately too.

    I don’t even live out in the boonies where the USPS regularly delivers packages for UPS and Fed ex…

    I could be wrong but delivering packages in the 137,988 mi² area that makes up Germany might be a tad different from the 3.797 million mi² of space that is called the USA.

  38. Andre Kenji de Sousa says:

    @Doug Mataconis:

    In any case, for me the USPS is basically obsolete.

    It’s not. Mail is basically a dead business but deliveries are not. When people talk about postal services they are talking about deliveries. The main issue would be providing delivery in rural, exurban and some urban areas. If the USPS is privatized you’d either have to have subsidies or impose a far more expensive service to these areas, and you’d see thousands of PO agencies closing.

  39. Mister Bluster says:

    I do lament the good old days 20 years ago when my pharmacist (the guy who sold me drugs) was a clerk at the local Post Office.

    1
    1
  40. Beth says:

    @Bill: Amazon only pays the USPS standard ground shipping for forwarded packages. The forwarding service is available at no charge to the customer, but it is the customers responsibility to change their own address. If you are a UPS box holder there is a significant fee to forward your mail.

  41. Michael Flores says:

    @Bill: Yes YOU Made a Mistake

  42. DrDaveT says:

    @Doug Mataconis: I assume you only replied to one of the horns of the dilemma I proposed because you have no answer to the other?

  43. V Johnson says:

    I didn’t see the post office talk about cutting management when they are the only agency that is top heavy. Ms. Megan should volunteer to cut her pay instead of cutting the real workers at the bottom. It funny how you have people sitting around and getting paid.

  44. v Johnson says:

    @mattbernius: you don’t understand your mistake….the time that going in to try to figure the correct address. So you might not agree what the wait because they try their best to find the correct address so it want be return back to sender.

  45. David Martinez says:

    Don’t blame Trump…blame Benjamin Franklin

  46. Anna says:

    If only they could raise rates on Amazon in particular. I had an Amazon package get lost in the maze of no mailrooms that is my office building, and got a personal phone call from the big city postmaster trying to sort it out so that the post office wouldn’t be charged. That shouldn’t really be the PO’s fault (our building is a mess) but I appreciated the professionalism and courtesy.

    A friend of mine delivers for USPS, and Amazon holiday packages have gotten brutal. It’s like you’re delivering mail, but all of a sudden you got hired to sling presents at Target for no extra pay.

    It’s one of the few good jobs in many rural areas, and I’d be sad to see it go. OTOH pre-funding pensions at least in part makes a certain amount of sense (if you lighten up on profitability now, you might actually get it later). My employer claims they’ll provide one if I stay long enough, but as a person three decades from retirement, I have no trust it will still exist when I get there.