The United States Postal Service (USPS) announced
on February 6, 2013 that it would abolish Saturday delivery and argued that
because Congress is operating under a temporary spending measure, not an
appropriations bill, USPS has authority to change service without congressional
approval.
Packages, mail-order prescriptions and Express Mail will still be
delivered on Saturdays. The plan will take effect the week of August 5, 2013.
Post office that are open on Saturdays will remain open.
This decision was made because USPS executives declare
they are in the red due to government mandating of funding employee health care
and retirement plan. However, I know firsthand that all the money is not used for
employee retirement plans. I personally know 5 USPS employees who retired in
the past few months and were expecting to receive their full pension but were
told there was no money and they only received $30,000 although they had worked
for over 30 years at the post office. For
years the Postal Service has had a surplus of funds in the retirement plan, so
if they are not giving the money to employees where is the money going?
Postmaster General Patrick R. Donahoe told a Senate
committee on February 13, 2013, “We also would like to see a proper calculation
of our Federal Employees’ Retirement System (FERS) surplus, and to use those
funds to reduce the debt of the Postal Service.” When did it become acceptable
to use retirement funds for something else? This should be criminal. GE, Enron and other companies found ways to
use their retirement plan money for other things rather than drawing on some of
its cash reserves - forcing employees into a sub-par 401K system which can reduce
the amount of money that employees get during retirement versus have a pension
plan. GE was slapped on the hand and Enron went under.
Wind, snow, sleet, rain, frigid weather don’t stop
postal mail delivery but somehow Americans have been forced to believe that the
post office is in such dire straits they have to eliminate Saturday
delivery. Eliminating Saturday delivery
is a knee jerk reaction to administrators who don’t want to be bothered with
taking the time to create a strategic plan to reduce costs. USPS has been experiencing financial problems
for years but senior executives have ignored the problem and have not
implemented any long-term solutions. I
believe the new postal mail delivery schedule will further increase the
economic gap between the rich and the poor.
According to Delivering for America, approximately 80,000 jobs will be
lost if one day of delivery is dropped. These jobs would impact Americans in
every state and could have a disproportionate impact on veterans, a group
historically welcomed into the Postal Service with open arms but still
struggling to find employment elsewhere in a weak economy.
Delivery of mail has already been impacted over the
past few years. I used to receive mail
by noon each day now I receive mail at 2, 3 or sometimes 5pm each day. Saturday delivery would personally affect me because
sometimes I cannot make it to the post office before it closes at 5:00pm and
rely on Saturday delivery for sending bills and correspondence.
Credit card companies are required to set a payment deadline at least
21 days after they mail cardholders' statements. The ending of Saturday
delivery may result in customers receiving their statements two to three days
later or may have a shorter time period to send payments.
Approximately 4.7 people still send payments by mail. On average customers need 7-10 days to send payments
by the due date. Without Saturday delivery it will take 8-11 days for payments to
be delivered by the due date. If the
following Monday is a holiday customers would have 2 days less to send payments
and it would take 9-12 days to send payments by the due date.
According to a
2012 CareerBuilder study, 17% of men and 25% of women missed at least one
monthly payment in the past month. This will increase if Americans have to
track their mail delivery more watchfully.
Terminating Saturday delivery may cause customers to
receive mail later in the day due to the increase volume of mail on Fridays. FedEx
and UPS don’t deliver bills, postcards or letters via first class.
Business is conducted 24/7 not just 5 days a week. Thousands
of businesses filed petitions against eliminating Saturday delivery with the
Postal Regulatory Commission last year but their concerns were ignored. Businesses that are not setup to
receive electronic payment still send bills by mail. Termination
of Saturday delivery would force businesses to use more expensive private
delivery services. Businesses who receive a lot of mail on Saturdays and trucking
businesses that receive customers’ payments by mail will be greatly impacted.
For those working in the financial and
legal industry offices are closed on Saturday and clients have to rely on
Saturday mail delivery to get paperwork processed on time. For clients with
court cases no Saturday delivery would mean the difference between whether
their court case gets dismissed or confirmed.
The industries that depend on postal mail delivery
such as advertising companies, newspaper publishers, bill-payment processors
have made digital investments but all of their customers have not.
Most greetings cards are sent via first class mail. Many greeting cards businesses and publishers
such as Hallmark receive a high volume of sales from September through December
and the Saturday delivery would affect accounts receivables and add delays on
checks sent through the mail.
Consumers order DVDs by mail with companies such as Netflix. Consumers that
watches movies the day they arrive and send it back the next day would be
affected if the next day falls on a Saturday. As a result customers would get
one less DVD to watch each month.
Many magazine publishers such as Conde Nast target
Saturday for delivery to maximize their readership and will
now have to deliver their subscriptions Monday through Friday.
Individuals who use businesses such as eBay to buy and sell items would
be impacted. Smaller companies cannot
afford to make digital investments and have relied on postal mail due to high
gas costs and high costs of using private firms such as FedEx and UPS. The one-day delay in processing a payment
could trigger a series of delays that impact operations. Smaller private companies may be cheaper than
USPS but may not be as reliable.
Kenneth Czarnecki, senior VP at CVS Caremark, which shipped more than
50 million prescriptions by U.S. mail in 2009, said at a recent forum that this
plan would add expense rather than eliminate it. "These added costs not
only impact patients' pockets but will also place significant fiscal strain on
our health-care system," he said.
Some companies may be forced
to implement digital technology but you cannot force someone to pay bills
online and receive paperless statements if they don’t have access to an
internet or don’t live near a library. Dropping Saturday delivery would cause
disproportionate harm to the elderly, those with limited Internet access or no
access, rural communities and small businesses.
American concerns about this issue were ignored especially
those in urban and rural areas. Cell
phone service and high speed internet access is not available in 50% of rural
areas and in many urban areas. Thirty-five
percent of all Americans do not have high speed internet access and are unable
to pay bills online or use mobile banking. Some customers in rural areas have
to retrieve their mail at postal windows. There are also areas where FedEx and
UPS do not deliver and these consumers would be dependent on postal mail for
Saturday delivery.
Consumers' outgoing mail
would not be retrieved from their home mailboxes on Saturdays, nor would
letters placed in a blue USPS box be picked up, says Darleen Reid, a
spokeswoman for the USPS. Letters delivered to a post office location will not
be processed that day, but will be processed Sunday for Monday delivery.
Five-percent of consumers get their paychecks in the
mail and not all companies offer direct deposit.
If a check doesn’t arrive on Saturday, it may cause a financial
burden to wait until Monday especially if Monday is a holiday particularly for
the elderly and disabled. Some employees do not leave
near a post office and must mail their bank deposits, confidential documents
and bills.
Ending Saturday delivery will affect
taxpayers who don’t have bank accounts and receive refund checks in the mail which
will take a few days longer to receive them.
Thirty-percent
of the country rents and don’t pay their rent, credit card bills or utility
bills on time. Even though rent
checks are usually posted on the first of the month they often don't arrive
until the 3rd. With the shutdown of Saturday mail delivery, rent
checks may show on the 5th of the month or later if the first falls
on a holiday weekend. With most landlord business bills due on the 10th, they
will no longer be able to rely on this month's rent checks to pay this month's
bills.
Congressman Richard E. Neal stated that “It
also does not address the onerous pension requirement that is one of the
primary reasons why the Postal Services is losing money.” The postal service
will still have a huge deficit of $16 billion with the elimination of Saturday
delivery. Democratic U.S. Senate
candidates Edward Markey and Stephen Lynch both oppose proposals by USPS to cut
Saturday mail delivery. They say there are other reforms, including revising
the method used to fund health insurance for employees, increasing the products
the Postal Services offers and consolidating more post offices, which can save
money and generate more revenue.
Senate Majority Leader Harry Reid was not happy,
saying that "The postmaster general’s actions have damaged his reputation
with congressional leaders and further complicates congressional efforts to
pass comprehensive postal reform legislation in the future." Maine
Republican Sen. Susan Collins was similarly critical of the move, questioning
both its adherence to the law and the damage that might be done to postal
business by cutting services.
Rep. Elijah Cummings explained on MSNBC: “You’re
talking about just this reduction … from six days to five days, will cut
anywhere from 25,000 to 30,000 employees. And with regard to Asian,
African-Americans, and Hispanics, they comprise about 40 percent of the Postal
Service employees. So it’s logical to believe if they were to lose that
30,000 jobs, easily 40 percent of them would be African-Americans, Hispanics,
and Asian-Americans.” According to The Hill, Cummings proceeded to point out
that over 40 percent of the post office’s employees are also women: “So you
have a lot of women, many of whom are single women — head of household, and
they depend upon that decent wage, decent working conditions and benefits to
take care of their families.”
Postal workers negotiated a contract with the postal
service and now it will not be honored due to the termination of Saturday
delivery. Eliminating Saturday delivery
would make the USPS less attractive for customers who would shift businesses to
independent companies that can serve all their needs which would further
increase the USPS deficit. USPS hasn’t
realized the quickest way to bankrupt a business is to continuously reduce
services to customers. With the increase
advances in technology customers wants more services not less.
In 2006, the President Bush and Congress passed
the Postal Accountability and
Enhancement Act requiring the USPS to pre-pay health care benefits within 10
years or by 2016 for current employees and all employees who will retire during the next 75 years.
In 2012, Last year,
the House and Senate produced competing bills to help decrease USPS’ financial
losses. The Senate approved legislation that would have delayed 5 day mail
delivery for 2 years while testing other cost-saving strategies, but the House
never voted on the issue. House Appropriations Chairman Harold Rogers (R-Ky.)
said he had no idea what his committee would do about the postal plan.
In 2011, during the 112th Congress, the
House introduced 60 bills to rename post offices.
Thirty-eight have passed the House and 26 have become law. No bills came to the House floor targeted at
reforming the USPS. The USPS’ recent decision and lack of action by Congress
shows that neither are concerned about the millions of customers and businesses
that will be affected by ending Saturday mail delivery.
On 2/6/13 in a tweet from @Topconversative Cat posted
on his Twitter account, “Paul Ryan: "The U.S. Postal Service shouldn't
stop Saturday service. Saturday is when rich people get their statements from
the Caymans."
Some blame the cost of unions as the reason for the
financial woes of the USPS. Working with
its unions, USPS has already reduced its workforce by 110,000 employees,
improved efficiency, and introduced new products and services. USPS processes over
40% of the world's mail and has a workforce that is made up of 40% women, 40% minorities,
and 22% veterans many who are disabled.
Many are pointing the finger but none are coming up
with viable solutions. All of the solutions implemented thus far have not
worked and have only hurt customers and USPS employees.
The media and the USPS have lead consumers to believe
the USPS is on the brink of bankruptcy and will go out of business soon but
that is not the case. The USPS nets
profits every year. The financial problem it faces now comes from a 2006
Congressional mandate that requires USPS to pre-pay into a fund that covers
health care costs for future retired employees. Under the mandate, the USPS is
required to make an annual $5.5 billion payment over 10 years until 2016. USPS states these prepayments are principally responsible
for financial losses since 2007. However, since 2007 the USPS produced a $700
million operational profit. The USPS and media led Americans to believe that no
one uses the USPS anyone and that it must make some major adjustments to
generate a profit but since it already generates a profit this lie doesn’t fly.
The post office is an independent agency whose revenue
comes from postage fees and services not tax dollars. USPS can’t be run like a
typical business because it is a service organization and should not be
required to make a profit. The USPS is
overseen by an 11 member Board of Governors.
Some members of Congress want the USPS to make a
profit but some government agencies don’t make a profit such as the FDA, FBI,
Centers for Disease Control, State Department, FEMA, and the Park Service and don't
want it competing with businesses that have lobbyists and give campaign
contributions.
Republicans have been pushing ploys to privatize USPS
since 1996. Congressman Romney stated he would eliminate the postal service. Unlike
other government agencies since 1970 USPS is required to break even. Republicans in Congress forced USPS to remove
public use copiers from Post Offices and prevented USPS from setting up a
secure online system that would have allowed consumers to make monthly bill
payments.
The Koch brothers' Cato Institute has been advocating privatizing
USPS. Frederick W. Smith, Chairman & CEO, FedEx
Corporation was on the Board of Directors of Cato Institute. FedEx is also a
funder of the Cato Institute. Cato Institute funders oppose
unions because they enable working people to bargain for a larger share of the
pie. The USPS is the largest remaining
union.
Ninety percent of the media outlets are owned by 6
companies: GE, NewsCorp, Disney, Viacom, TimeWarner and CBS and control 70% of cable
service. These companies have a vested
interest in remaining profitable and privatizing the USPS would help them do
just that.
Due to a 40-year-old accounting error, the Office of
Personnel Management has overcharged USPS $80 billion for payments into the Civil
Service Retirement System having billions of its sales dollars erroneously
diverted into the treasury. It has also overfunded the Federal Employees
Retirement System (FERS) by approximately $6.9 billion. That adds up to $86.9
billion that would be enough to finish funding the pre-pay health care benefits
and eradicate the USPS deficit.
The USPS performed a survey 1,002 respondents and requested
its market research company to redo the survey using distinctive questions and asked
the Postal Regulatory Commission to seal the original survey results and keep
them hidden from the public. Neither I
nor any of my friends, associates or family members were given an opportunity
to express our concerns about the new postal delivery schedule although on the
USPS website is states that 80% of Americans support the new schedule. So USPS is stating that 1,002 respondents who
support Saturday delivery can speak for millions of Americans on the issue.
Congress told the USPS to serve all areas of the United States, to break even, prevents them from
raising or lowering rates as needed, precludes them from adding new services
without prior approval, restrains them from using their competitive advantages
to compete with private businesses and compels them to pre-fund 75 years of
health benefits. No wonder they are struggling.
Congress carps about the unions and demands USPS sell their buildings, fire
employees laid off and privatize. This ensures that all the benefits go to the
wealthy instead of consumers and employees. The wealthy will benefit by customers and
companies using more expensive services that will generate profit and tax
breaks to already profitable businesses and reduce discretionary income of
customers and small businesses.
The USPS attempted to close 3,700 post offices but due
to complaints from customers it condensed hours at 13,000 locations, closed
some offices were closed or consolidated offices which has already affected
delivery services to millions.
Quoting examples from postal systems around the world,
the National Association of Letter Carriers (the postal workers' union) argues
that the only way to close the gap between the USPS's costs and the revenue it
brings in is to raise the price of a postage stamp.
Patrick Donahoe, the U.S. postmaster general since
2010 stated, “To right the agency, he says it’s necessary to pare back the
workforce by another 150,000, eliminate Saturday delivery and close postal
facilities that are a drag on the agency’s bottom line.”
A measure of good faith would be shown if the postal
master general, other postmasters and managers took a 1% pay cut for one
year. Also, if senior postal executive
receive bonuses, commissions or other perks these should be eliminated.
Other countries such as Germany, France, Italy and
Sweden have successful postal mail systems and a similar model could be adopted
in the U.S such as a public banking system that would provide postal banks that
could serve the 9 million unbanked and the 21 million who utilize check cashing
stores. The public banking would provide basic checking and savings. This would
eliminate the predatory prepaid debit cards that are in circulation and save
the unbanked money paid in predatory fees.
USPS should think of creative ways to create new products and services
which is a basic sales method used by most businesses to generate revenue and
grow. USPS can stop renting lavish offices in places like Boston, New York,
Chicago and Los Angeles and move those services to offices already owned by USPS.
USPS could bring back public use copiers in each post office. USPS can create
mobile applications: for customers to track their packages and for businesses
to setup and manage their accounts, and renew services such as Post Office
boxes.
Instead of lowering the price of postage for first
class mail USPS lowered the price of postage on corporate junk mail and
advertising which should be charged higher rates than first class postage. This only helps the wealthy and profitable
big businesses and continues to hurt consumers.
Next year the USPS will have to come up with another
solution to reduce the deficit since the elimination of Saturday delivery does
nothing to help their financial problems.
In addition, the next step the USPS will likely make is to lay off
employees. The solution to saving the
U.S. Postal Service is offering new services and lower rates. Let’s see how
this will affect the next election.
