The only way to successfully get rid of the Post Office first break the back of their union.
I have made the argument for years the Postal Service needs to be privatized.
Postal Service: What do you call a business that increases its revenue by more than $1 billion during a boom year but ends up nearly doubling its losses? The U.S. Postal Service. Is it finally time to privatize the post office?
Just last week, the Postal Service released its latest annual report. It cited an “ongoing volume loss” of 3.6% for the year. In other words, its business is shrinking, a result of emails, social media and other tech-based platforms that let Americans communicate with one another instantaneously and basically for free.
No shame in that. Lots of businesses have been done in by tech changes. Video rental shops were a staple of the American suburban landscape in the 1990s. Today, they’re nearly all defunct. Same with record stores.
But when businesses in the private sector lose money, they go out of business. Not so the USPS. It lost almost $4 billion in fiscal 2018, up 44%, while its revenue rose more than $1 billion to $70.7 billion.
“Simply put, we cannot generate revenue or cut enough costs to pay our bills,” Postmaster General Megan Brennan told Government Executive, as reported by Reason Magazine.
As Reason Magazine’s Eric Boehm noted, “What’s really stunning is that USPS managed to lose so much money in a year when income from shipping packages jumped by 10% and overall revenue increased by 1.5%. That wasn’t enough to make up for an increase of $896 million in personnel costs.”
Scary Pension Liabilities
Indeed, the USPS has made big cuts in both the number of workers and post offices in service. But it owes billions and billions in pension and health care costs, which continue to erode its financial position.
As recently as 2003 to 2006, the Postal Service reported profits every year. Since then, however, it has lost money every year. A lot of money — $63.4 billion, total. It owes $15 billion in debt, but its underfunding of employee pension and health care liabilities is truly massive: Nearly $110 billion.
By its own admission, the post office is doomed. Buried deep in its 10-k government filing is this bleak statement: “Existing laws and regulations limit our ability to introduce new products or services, enter new markets, generate new revenue streams or manage our cost structure,” it said. Imagine a private company telling its investors that.
This can’t go on. Privatization is the only viable option. The White House last summer proposed to do just that, by either selling off the post office or bringing in private managers to run it. At least a profitable postal company that can sell its shares to investors, manage costs, hire and fire workers, and expand and close lines of business would have a chance. Today’s U.S. Postal Service doesn’t.