From the desk of Stephen Cabot: Angela Greiling Keane reported on Bloomberg News that the U. S. Postal Service negotiated a 4 ½ year contract with the American Postal Workers, which has 202,000 members. She quotes Representative Darrell Issa, a California Republican, as stating: “We have deep concerns that some of the provisions of the contract may in fact be the wrong direction, to less flexibility, less ability to trim the workforce and less ability to in the future make the kinds of investments we need to make.”
The new contract will not stem the tide of enormous losses; and it will certainly not lead to a renaissance of profitability for the postal service, which has suffered losses for the last five quarters. Its labor costs are a whopping 80% of its total budget, while labor costs for UPS are 69% of its operating budget, and 43% for the operating budget of FedEx, which is staffed by a combination of employees and independent contractors.
Until the postal service can bring its labor costs in line with private sector employers such as UPS and FedEx, it will continue to run huge billion-dollar deficits. The sorry state of the U. S. Postal Service is just another example of how public-sector unions drive companies into the ground. The goals of the governors of Ohio and Wisconsin should become the goals of a fiscally responsible federal government.