Union employees not supportive of cuts
Hemorrhaging red ink to the tune of a record breaking nearly $16 billion in 2012, the U.S. Postal Service, which has a legal monopoly over first class mail service, will stop Saturday delivery in August. The financial losses for the fiscal year ending Sept. 30 were more than triple the $5.1 billion loss in the previous year
Last year, was particularly turbulent for the USPS, as it defaulted on over $11 billion in retiree health benefit prepayments to avert bankruptcy. Read the Postal Service statement here.
And as Shakespeare‘s Hamlet so well stated. “Therein lies the rub.”
Patrick R. Donahoe, postmaster general and CEO, says research has indicated that nearly 7 in 10 Americans support the switch to five-day delivery as a way for the Postal Service to reduce costs.
Donahoe likely limited his polling to himself, other postal executives and retired postal service employees. This report in the Washington Times gives the shocking account of bloated salaries, massive retention/incentive bonuses, and lucrative pension and deferred compensation deals for these top brass. Last November, the Postal Service’s politically appointed board of governors announced no “performance awards” would be paid in 2012 due to the “dire financial condition.”
That should have been a given.
“The Postal Service is advancing an important new approach to delivery that reflects the strong growth of our package business and responds to the financial realities resulting from America’s changing mailing habits,” Donahoe said. “We developed this approach by working with our customers to understand their delivery needs and by identifying creative ways to generate significant cost savings.”
He said the change would mean a combination of employee reassignment and attrition and is expected to achieve cost savings of approximately $2 billion annually when fully implemented. In view of the dismal reality, that amounts to a drop in the bucket.
The agency’s biggest problem, and the majority of the red ink in 2012, was not due to reduced mail flow but rather to mounting mandatory costs for retiree benefits, which made up $11.1 billion of the losses. The Retirees Department of the American Postal Workers Union, an AFL/CIO affiliate, opposes any cuts.
Check out the full time, basic rate pay schedule here. Who knew the taxing job of delivering mail could pay up to $64,580…excluding benefits?