August 16, 2011 | Commentary on Regulation
Will the last one to leave the post office please turn out the lights?
Things are looking pretty grim at the Postal Service. In a report made public today, the U.S. Postal Service (USPS) proposed cutting 220,000 positions, leaving its workforce – which once ranked with Indian Railways and the People's Liberation Army as among the world's largest – at 425,000. Some 120,000 of these cutbacks would be through layoffs, which are barred under current union contracts.
The reason for the cutbacks is clear: The Postal Service is running out of money. According to the USPS report, which was made public Friday in The Washington Post, the Postal Service is on the "precipice of insolvency."
That's no exaggeration. The recession has hit the postal service hard, accelerating a long-term trend away from mail delivery and toward electronic communications. The numbers are stark: USPS mail volume has declined by 20 percent over the past four years, during which it has lost $20 billion, including over $3 billion in the last quarter alone. Even after the overall economy recovers, these numbers are not expected to rebound: Once business moves over to the Internet, it tends not to come back.
There's no guarantee that the USPS can be saved. In the not-so-long run, paper mail delivery may be as dead as the singing telegram. But whatever its future, cutbacks are a financial and business necessity. Postal management knows this: In addition to the workforce reductions, it wants to drop out of the expensive federal health and retirements systems and drop Saturday delivery service and has targeted over 3,600 post offices for closure.
To achieve the needed changes, however, action by Congress is needed. First, approval is needed to break the union "no layoff" contracts (if USPS were a private company, such action would be the first step taken by a bankruptcy court). Congress should also eliminate current laws that restrict the closure of post offices and that mandate six-day per week service.
In the past, efforts at such reforms have been stymied by political pressure to preserve the postal status quo. That is no longer possible. The world has changed, and the postal service must change with it. Congress should not stand in the way.
James Gattuso is a senior fellow at The Heritage Foundation.
First appeared in The Orange County Register