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150,000 Postal Workers to Lose Their Jobs

Posted By on May 31, 2012

Occupy the Post Office

Occupy the Post Office

May 15th marked the end of the 4 ½ month moratorium on post office closures. The Postmaster General was pressured to call the moratorium last December, following an outcry from Senate and state leaders. A week after the moratorium ended, the US Postal Service (USPS) finalized plans to lay off 150,000 postal workers over the next three years. According to the May 26th New York Times, the post office plans to close 229 of its 461 processing centers and reduce its workforce from 600,000 to 450,000 by 2104. The first 45,000 mail handlers, who are being offered $15,000 payouts, are slated to go by the end of 2011. According to the Times, a big decline in mail volume, as Americans shift to the Internet to communicate and pay bills, leaves the US no choice but to close processing centers and rural post offices.

The Role of ALEC in the Demise of the Post Office

The Times Free Press indicates the real reason for the closures and layoffs is a $3.2 billion dollar deficit for the first quarter of 2012. Part of this loss relates to declining revenue coupled with escalating fuel and energy costs. However as Ralph Nader emphasizes out in a April 26th letter to Postmaster General Patrick Donahoe, 80% of this deficit relates to a congressional requirement that the post office pre-pay federal health benefits for their retirees. Occupy the Post Office believes this onerous requirement – unheard of in the corporate world – is part of a deliberate strategy by corporate lobbyists to privatize America’s oldest and most important public service. They remind readers that the law was written by the infamous American Legislative Council (ALEC – see * below) and its Congressional members, who have an overt agenda of shrinking and privatizing public services.

Since 1971, the USPS has been expected to run as an independent, corporation-like agency of the federal government. At the same time, strong ideological opposition to a publicly run postal service has led Congress to create onerous regulations that make it impossible for USPS to run as a competitive business. In addition to the requirement around prepaid retiree health benefits, the post office is still waiting for a refund of an $80 billion overpayment to the Civil Service Retirement System and the Federal Employees Retirement System. USPS also operates under congressional regulations that prevent them from offering digital services to capture some of the first class business they are losing to Internet providers.

Nader finds all this especially ironic, given that the post office was one of the only  “corporations” to receive no corporate welfare related to the economic downturn.

Why Nader is Calling for Danohoe’s Resignation

Nader highlights the disconnect between Danohoe’s repeated emphasis on running the post office like a business and his decision to embark on the worst business strategy possible – raising prices while simultaneously cutting services (i.e. closing rural post offices, eliminating Saturday delivery and guaranteed overnight first class delivery). The only effect of such poorly conceived changes will be to hasten the loss of postal customers who won’t return. His letter also reminds Danohoe of the strain his own $400,000 compensation package poses on the USPS budget, along with several other postal executives with base pay rates over $200,000. Added to this is the substantial cost of subsidizing cheap bulk mail services for businesses.

He also faults Danohoe for failing to consider – or even to respond to – dozens of practical proposals for making the post office more profitable. These include suggestions by Senator Bernie Sanders for the post office to offer high demand services, including notary, check cashing and gift wrapping services; the sale of hunting and fishing licenses and accepting wine or beer for delivery.

Danohoe has also failed to respond to two dozen practical suggestions from Ruth Goldway, chair of the Postal Regulatory Commission, and others from one of the conferences on innovation held in the summer of 2010. Nader is equally critical of Danohoe’s dismissive attitude towards the reinstatement of a Postal Savings Service (ended in 1967), a proposal by the Appleseed Group, an agency years of experience dealing with the “unbanked.” They estimate there are over 30 million “unbanked” Americans in 35,000 communities who would make use of such a service.

Effect on November Elections

Makes you wonder how many votes Obama will get from postal workers in November. Not many, I expect. It would appear that our President is tired of the job – that he wants Romney to win.

*On a separate but related issue, ALEC is currently facing a whistleblower suit instigated by Common Cause, related to leaked documents revealing that the corporate lobbying group has misrepresented itself to the IRS as a charity. This enables corporations to claim contributions to ALEC can be claimed as a tax deductible charitable donations. It also means that ALEC is in violation of strict IRS regulations that prohibit non-profit charities from engaging in lobbying.


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