Thursday, 11 August 2011
US Post Office must shrink or die. Contracts will be broken. UPDATE.
Their proposals: Cut service from 6 to 5 days weekly. Shut branches. Reduce the 560,000 workforce by 220,000 through attrition (100,000), buyouts and layoffs forbidden under present contracts. They want to pull out of the federal employee health and benefit plan and run their own plan. Labor costs are 80% of the budget and they have to go down. Average compensation with benefits and pension reserves come to $41.15/hr. USPS is also supporting 480,000 pensioners.
Link to salaries excluding benefits for Postal Workers. (Rough-and-ready conversion: $40,000/year is $20/hour)
A sticking point is a 2006 law requiring USPS to pre-fund pensions to the tune of $5.6 billion per year, an amount that includes coverage for people not even hired yet. Independent audits identify at least $50 billion overpayments in the past to the Civil Service and Federal Employees Retirement Systems. If Congress bill HR1351 should pass to return this to USPS pension funds, they will be fully funded.
This will make the Wisconsin fight seem small. Americans' confidence in their way of life will be shaken while the Post Office is on death watch. Why not allow competition to deliver the mail?
Source Washington Post or Zero Hedge.
Update Sept. 6th. Stirrings in Washington to do something about it.
Update Sept. 8th. "Prehistoric mastodon sinking into the La Brea tar pits." Is the USPS really overpaying into pension funds? "Perhaps the pension savings are coming because with two thirds of its employees on the chopping block, the USPS won’t be paying as many pensions in the future as currently projected". From Walter Russell Mead: Snail Mail Spam Subsidies Stuttering Towards A Stop