The Death of the Post Office

We're witnessing it today. I am speaking from the standpoint of having worked in the system from 1979 until retirement in November, 2007.

It's just a matter of time. The PO is rapidly becoming functionally obsolete. Yes, we hear old timer employees saying, "I've been here for 30 years and they've talked about eliminating six day delivery before." This may be true, but all those years ago e-commerce and the internet didn't exist. The current financial crisis is just hurrying things along; the PO had big problems before that. The numbers are much bigger now; they used to talk about losses in the millions, now in the billions.

The politicians may try to resist the trend for a while, but that will only prolong the agony and continue big losses that eventually the government will have to pick up. The Congress will only have the stomach for that for so long. Rural service and small post offices are expensive and drag down the profitable service; eventually not even constituent pressure will preserve those money-losing services.

Five day service will give the PO temporary financial relief. It only makes sense to compress smaller volumes into a shorter delivery time span. Forget receiving higher pay for more work on each remaining day; by that logic, pay should have gone down in recent times when volumes decreased. Don't expect weekends off; five day delivery is about increasing efficiency, not increasing worker satisfaction. The vast majority of the public under the age of 65 really doesn't care if a day of delivery service is eliminated.

The other bad news for postal labor is that the trend is away from highly-paid, low skilled labor. The time for paying someone $60K a year to stick letters in holes will be coming to an end one way or another.

The PO won't die tomorrow, but it's difficult to imagine a postal service in ten years that looks like the one that exists now.

Part of the problem with making meaningful change in the PO is that it’s highly institutionalized, sclerotic, and paralyzed. There are rice bowls to be protected at every level. It’s an organization that has a long history of working by a well-established, voluminous set of rules and regulations (including collective bargaining conditions) and a strong culture of routine. This makes change come very slowly in a modern society that becomes more accustomed to rapid change daily.

Being an instrumentality of the government works against meaningful change in the PO as well. This condition of over-regulation is one that suspects everyone of trying to steal a nickel, but overlooks being hi-jacked of billions. Then there’s the political input from many different constituencies that resist change for political reasons that have nothing to do with business.

Let us not forget the direct mail industry who hires gangs of lawyers to lobby in DC. OH, they cause change for sure. They are the driving force that changes business mail rates and rules to their advantage and that rob the PO of revenue.

Five day a week mail service makes sense for the PO in the current fiscal atmosphere. However, by the time all the special interests get to put their chop on it, implementation will be tardy and more financial losses will have piled up.

The biggest thing working against a successful future for the PO is the social change that is going on. This change is hard to work against. Here’s a little story to illustrate. I was in a pawn shop a few months ago, killing time. I used to like to go in such stores to look at the various watches in the display cases. I asked the sales clerk in this shop, “Where are all the watches?” as I couldn’t seem to find any. She replied, “We don’t take them in anymore.” When I asked her why, she said, “Young people don’t need a watch because they all have cell phones and there is a clock on the cell phone.” After that, I started looking at young people’s wrists and sure enough, not many watches were worn. It’s the same deal with the PO. Young people don’t need it, for the most part. They pay bills online, they communicate with friends and family online, and they don’t subscribe to many publications online because the information they need, they get from the internet. The occasional small Ebay package that they may receive isn’t enough to keep the PO going. At one time in the United States, there were hundreds of buggy whip makers. When the horses went away, so did the need for buggy whips. As time goes by, the need for services changes.

Oh, it’s possible that by some unforeseen event, this trend could reverse. There could be a thermonuclear device go off in the stratosphere over North America, and the resulting EMP (electro-magnetic pulse) would disable 60% of all electronic devices. If this were to happen, the need for hard-copy delivery would re-emerge. Could this happen? Yes. Is it likely? Not very.

Now as to the subject of skilled and unskilled labor. When I retired from the PO, I had put in 35 years as a craft employee, so what I am going to say here is not meant to insult or offend. When a person hires into the PO, that person doesn’t need to bring a skill to get hired. The PO trains that person in their duties. When a person leaves the PO, the skills they acquired there are not salable in the commercial labor market. That basically defines unskilled labor. Those employees who work within the body of craft employees who have a college degree are the exception, not the norm. Their education was not a condition of postal employment. Their being postal employees probably suggests that they made bad choices earlier in their lives. A craft employee with a GED can stick letters in holes as well as someone with a bachelor’s degree. My own experience is that often the less intelligent employee is more productive, because the more intelligent one is sometimes apt to figure out ways to game the system.

The PO has been a Golden Goose of blue collar labor since 1971, and a refuge for many to make a decent living. That doesn’t mean it’s going to go on forever.

There was a postal service prior to 1971 and that was the United States Post Office Department. It was a department within the executive branch and was completely government controlled. Craft employees under the POD were paid under some of the lowest General Schedule (GS) rates. Postal employees were notoriously underpaid and in general it was a place lots of people didn't want to work. Employees took the pay they were given; there were no negotiated COLAs or contractual raises. Once in a while, they would get a small raise with the rest of the GS employees.

There were work stoppages and localized paralysis of the USPOD in 1969 and 70 and it was considered a "crisis" at the time. The solution President Nixon and his advisors came up with was to create the USPS, and I'm sure that the power that eventuated to postal organized labor was not originally foreseen. Just like Nixon could not foresee China later dominating world trade after he "opened the door" to China during his administration.

If the US government had killed the POD in 1971, it wouldn't have been as big a deal as phasing out the USPS would be now. Back then, there weren't a bunch of interest groups to keep it going as there are now, including craft labor unions. Weak union representation existed, but there was no collective bargaining and no National Agreement.

Well, the Congress giveth and the Congress can taketh away. I've wondered why USPS management keeps signing contracts that run longer than a year. I've decided that those on high probably feel that contracts can be broken, especially by Congress.