Sunday, October 16, 2011

Mailing it in

I was going to write this post about the troubles facing the US Postal Service before I became computerless, but it didn't get done in time. Happily for me, the National Association of Letter Carriers just announced it is hiring its own financial consultants to consider the longer-term finances of the agency, giving me a hook to post this now.

You may well have heard about the problems of the mail service and if you have, you know that, as per usual for media accounts of such things, it has been described in apocalyptic terms.

The Postal Service is going broke! is the cry. It can’t make a required payment coming due! By the end of winter, it won’t be able to put gas in its trucks, much less pay its employees! In the words of our supposed “paper of record,” the New York Times,
[t]he 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.
Edge? Precipice? Omigosh, this is serious! We have to do something! We have to save the postal service!

And what is the first option that springs to mind, the first option that always seems to spring to mind in cases like this?

Cut services and fire workers.

That’s it: The proposals advanced by Postmaster Patrick Donahoe involve ending Saturday mail deliveries, closing hundreds of mail-processing facilities, and laying off, that is, firing (Remember when “layoffs” were called that because they were supposed to be temporary? I do.) some 120,000 people, a full fifth of the entire work force.

This is a “solution” that even its advocates admit will result in less service, fewer deliveries, and slower deliveries (because the loss of those processing facilities will cause it to take longer for mail to get from A to B).

The “logic” of this escapes me. Suppose you had a mechanic you went to when you needed work on your car. The place was open on Saturdays so you could bring the car in on your day off. One day, the owner says to you that what with the economy and all, the shop will no longer be open on Saturday - so you’ll have to bring you car in on a work day - and there will be fewer mechanics, so it will take longer to get the work done. Fewer options, slower service. This, you’re told, is how they intend to keep your business.

If that doesn’t make sense to you, then neither should the proposed “solutions” to the problems of the USPS.

So why is the postal service in trouble? Two reasons are usually given: One is email. “No one writes letters any more! It’s all email! Who still uses [sneer] snail mail?”

The other claimed reason, it should be no surprise, is labor unions. “Yeah, those greedy, lazy, good-for-nothings! Selfish layabouts! Overpaid feather-bedders! It’s all their fault!”

Well, the claims are bogus. The economic crisis faced by the system is quite real, but its causes, as is often true in these matters, are far removed from the claims.

Email first. The Postal Service has been around 236 years now. In all that time, the busiest year, the year with biggest volume of mail, the greatest number of pieces of mail handled, was in 2006. The second busiest year was 2005; the third busiest year was 2007. The popularity of email clearly predates that, one indication being that while the term "snail mail" has been around in various guises for some time, its use to denigrate regular mail as opposed to email dates as far back as 1981.

The naysayers respond by pointing to the drop-off in mail traffic since the peak five years ago. And it’s true, there has been a rather significant decline. But what they don’t mention is that the real decline began in 2008 - that is, when the economy tanked. When that happened, there was a large scale drop in business mail, which makes up a considerable part of the total volume of mail. So of course the total dropped. Blaming that drop on email is crap.

That’s especially true because, as others have pointed out, if you buy something online - from, from eBay, from a catalog, whatever, and you choose to have it shipped to you by the cheapest means (which almost invariably will be regular mail) your use of on-line commerce will actually have served to increase the volume of mail the USPS handles. As union official Chuck Zlatkin noted, “I’ve yet to see anyone figure out how to email a shirt.”

Email has had an impact, yes, but it’s biggest impact has been in personal letters, the kinds of things one individual would send to another. The point is that the impact is not nearly as severe as is claimed and does not account for the problems the USPS faces.

So what does have an impact?

The impacts start with the observation that the USPS is a quasi-governmental agency, run independently but still subject to certain legal restrictions set down by Congress.

(At this point it’s important to point out that those ads you may have seen claiming that the USPS gets no taxpayer money are true. The Postal Service is entirely self-funded through the sale of postage and gets not a penny in public funds.)

One restriction the agency faces under the law is that it cannot raise postage fees faster than inflation. This creates a problem in raising additional revenue. In basic capitalist economics, a business has two ways to increase revenue: Increase the amount of business you do or raise the price of each unit of that total business. The idea is that a business will keep tweaking those two - price per unit vs. number of units - to find the combination that maximizes income.

But the Postal Service, by law, cannot use one of those options. Which means the only way it can increase its real revenue (and actually improve and expand service) is to increase its volume of business - even do it even as a variety of voices now are talking about changes that would very likely decrease that volume.

Face it: Mail is a bargain. You can mail a letter anywhere is the US, you could send one from Key West to Point Barrow, for 44¢ - an amount that otherwise might get you half a candy bar.

And when I say anywhere, I do mean anywhere. The USPS is legally required to provide universal service and it makes deliveries to 150 million individual addresses nationwide every week. It has to make mail service available to everywhere - you may have to travel a bit to get to a post box or to where a whole group of mailboxes stand at the end of some rural byway, but mail must be available to everyone. Even if you are way out in the country, even if you are in some neighborhood deemed "too dangerous" for services like taxis, the mail still must be available. That is a requirement which does not exist for the Postal Service's private competitors like UPS and FedEx. They don’t have to do that: They think your address is too inconvenient or otherwise not profitable, they just don't do it.

Which means, in turn, that there are millions and millions of people who need, who rely on, the USPS's services, including poorer people, folks in rural areas outside the usual delivery areas, people who use post offices boxes, and many more, including some small-scale entrepreneurs who often find - as I noted above - that the USPS is the cheapest way to ship goods. Which means in its own turn that the people who do not depend on the USPS tend to be the rich, the powerful, the connected: people who for their own selfish reasons often are more concerned - despite their smiling assurances to the contrary - with bringing the system down than with preserving it.

One solid basis for that assertion is the federal Postal Accountability Enhancement Act, passed in 2006. That bill, among other things, mandated that the Postal Service fully fund retiree health benefits for future retirees out to 75 years in the future. That is, Congress was requiring universal health care coverage - and yes, I do note the let's be polite and call it irony here - for all Postal Service retirees for the next 75 years. And what's more, the agency had to establish the fund to do that within 10 years. Put another way, Congress was requiring of the USPS that within 10 years it be able to fully fund health care benefits for future retirees who hadn't even been born yet. That is a requirement of, a task taken on by, no other agency, corporation, or organization in or out of government in the US.

The cost of that requirement is running to $5.5 billion a year, a major part of the $8 billion projected shortfall.

So is the talk now about relieving the USPS of that idiotic requirement? Nope. It's about cutting services and firing workers.

That’s one solid basis; here’s another: It was recently realized that by some serious accounting screw-up, the USPS has been overpaying into worker pension funds. The Postal Service's Office of Inspector General estimated that the overpayments now total about $75 billion; the independent Postal Regulatory Commission came up with a figure of $50 billion in overpayments. Even accepting the lower figure makes the projected shortfall in the agency's budget look like chump change.

So is the talk now of letting the USPS recover those overpayments or at least move them from one account to another to cover the health care pre-funding requirements? Of course not - it's about cutting services and firing workers.

And the talk of firing workers persists despite the fact that there is a no-firing clause in the union contract. But the determination to go that route is so strong that Donahoe even asked Congress to write a new law voiding the contract to empower him to dispose of people at his own whim.

And it is here where we come to the crux of it all: the workers. The USPS has a strong union which is also one of the largest unions in the US, with something approaching 600,000 members. So let's be clear here: That's what the attacks on the Postal Service are about. They are about destroying the union.

All the usual claims about the supposedly evil union are being thrown about, with the usual idea that if enough tar gets slung, some will stick. Oh, they have such high pay! Oh, they have such high benefits! Oh, they get so much more than others! Oh, they are so demanding, so selfish!

Well, bluntly, postal workers do have good pay, they do get good benefits, and they do have good job protection.

Good! That’s what unions are for, dammit!

I am just flaming sick to death of hearing people gripe about how union workers, especially public employee union workers, "have so much." I am flaming sick to death of people who have swallowed the corporate line. Get a clue, people! The issue here is not why they - union members - have "so much," it’s why you have so little. This threatens to become a leitmotif here, but I will say it again: Make sure you are angry at the right target! And unions are not your enemy.

But that, ultimately, remains what all the attacks on the USPS are about: breaking the union and undermining idea of government services whose primary beneficiaries are not, again, the rich, the powerful, the connected.

How bad is it? Rep. Stephen Lynch has sponsored a bill to allow the USPS to shift the overpayments in the pension fund into the fund for future retiree health benefits, relieving the agency of the yearly burden of filling the latter and thus eliminating the need to terminate Saturday mail delivery or to close down mail processing centers while saving the jobs of 120,000 workers. In response, Darrell Issa, the GOPper who, unhappily, chairs the House Oversight Committee, called the proposal "a bailout" - a bizarre claim even for him, considering that it would not involve the expenditure of a single public penny - and has used the current (and quite possibly temporary) financial crunch as an excuse to introduce a bill to create an "emergency oversight board" which would have to authority to slash services and tear up any union contracts.

Now, even if it passed the House, Issa’s plan would face opposition in the Senate, including from some GOPpers who understand how popular the mail service is among their rural constituents. But still, the bottom line here is that while the problems of the Postal Service are real, the focus of the right wing and its corporate cronies (with the expected cooperation of a compliant media) is not on solving the problems (even when easy solutions are staring them in the face) but on destroying the service.

Then again, that should be no surprise: As Allison Kilkenny wrote at Truthout:
So, here we have a service that caters primarily to the economically disadvantaged and employs over 574,000 union members.
And, I would add, a successful government service and a popular government service. No wonder the reactionaries want to destroy it.

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