Will Financial Woes Stamp Out The U.S. Postal Service?

It’s no surprise that the problems of the United States Postal Service (USPS) have become unmanageable over the last decade and have led to its escalating economic crisis. Despite the record 213 billion pieces of mail it processed just five years ago, “snail mail” struggles to compete — especially electronically — and, since then, its volume has dropped 22 percent and its deficit has ballooned.

Part of problem is unprofitable post offices that continually take in less than they cost to operate. Consequently, almost 4,000 post offices have been targeted for closing, starting in January, including five of the 54 that serve Brooklyn. One is the branch on Coney Island Avenue in Brighton Beach, which has been targeted for closing every time cutbacks are proposed since 2009.

This summer, as reported on Sheepshead Bites, State Senator Marty Golden and Congressman Jerrold Nadler engaged in efforts to prevent the closing of the Brighton Finance Station. In separate letters to Donahue, they urged him, despite budget constraints, to remove it from the list. Their pleas, however, seem to have been disregarded as the station at 3157 Coney Island Avenue remains scheduled for closure.

And Sheepshead Bites itself is no stranger to reader complaints about our other local post offices, like the Sheepshead Bay branch. We get at least one e-mail a month about it, most recently from a reader who wrote to request we look into the allegedly poor way customers are treated.

Like that reader, I, too, am frustrated at times with the quality of service at the East 18th Street location, as well as the one on Avenue X, off Nostrand Avenue. As a rule, personnel at both sites are courteous, but there have been occasions when they tend to be rude and uncooperative. I have learned to total the postage beforehand when I use stamps on a package because some clerks refuse to use calculators to determine the total.

So what’s going on? How come the post offices we have are either closing, or simply a bad experience?

Earlier this month, Postmaster General Patrick Donahue announced that the USPS was more than $12 billion in debt and, if Congress didn’t allow it to consolidate, will eliminate Saturday delivery and borrow money. It would be “on the brink of default” by month’s end and possibly forced to shut down by next summer.

As the nation’s financial woes continue to get top billing, a federal bailout would not be too popular. And, with various alternatives to snail mail, public opinion might not accept such a bailout as practical.

On top of that, about a third of its workers (more than 120,000 employees) may have to be laid off. In fact, the USPS said that it would now have to examine half of it post offices across the nation and determine which ones to close over the next decade.

The USPS is reportedly already reaching out to convince local merchants to add a “village post office” to their business to replace some that close.

It’s been a long road to get where we are today, beginning as one of the most important pieces of American infrastructure and now finding itself in consideration for total elimination.

The USPS was established in 1971 as an independent, self-sustaining agency of the federal government, almost two centuries after Benjamin Franklin was named the first chief of constitutionally-mandated Post Office Department. But, less than two years later, its first major competition began to surface when Federal Express was capable of faster package deliveries by ground and air. In 1975, UPS emerged and promised delivery service to every address in the continental U.S.

Within a few years, letters and correspondence could be transmitted almost instantly via fax (short for facsimile), the transmission of scanned printed material (both text and images) via a telephone or other device.

Meanwhile, as these new services and devices were being used more and more by businesses, the only changes at the post office were higher postage rates.

Modern technology gave USPS its toughest challenge — and what may ultimately prove to be the knockout punch — in 1993 via the quickly advancing Internet that allowed correspondence to be sent electronically in seconds or minutes depending on the capacity of the document.

Despite its independence, however, Congress regulates the USPS and must authorize any changes. The agency’s operating expenses are derived solely from the sale of stamps, postage, products and services. No tax dollars can be used for its operating expenses. However, its 560,000 workers are federal employees and, therefore, reap government medical and disability benefits, among other compensation, which is estimated to be 40 percent of the benefits paid annually by the government.

And the biggest outlay for Post Office goes to employees, which is the crux of its financial dilemma. According to the WSJ, the average postal worker earns more than $83,000 a year in wages and benefits. Postal worker compensation is much higher than that received by private workers, who also pay more for health benefits than postal service employees. That generosity is a result of poorly negotiated union bargaining. Now it’s time for the union to make drastic concessions or stand idly by as tens of thousands of workers get laid off. In this economy, that would not be a wise option; but it is necessary since almost half of the postal service’s debt is for retiree’s future pensions and benefits.

In recent years, the USPS has slashed billions of dollars and reduced its workforce by more than 125,000. But that obviously hasn’t helped.

It’s confounding that while the USPS cannot make changes without Congressional approval, how its union managed to bargain for such liberal employee benefits and contract terms, such as banning layoffs, regardless of its financial status.

Has anyone considered that perhaps federal legislators, with one eye constantly on the next election, deliberately ignored union demands since the recipients of that bounty could sway votes?

Despite the abrupt inconvenience, particularly for seniors who spurn technology and would suffer the most by the local branch closings, the United States Postal Service appears to be headed for the scrap heap of concepts that couldn’t keep with up contemporary advances.

The Wall Street Journal once cited it as “the most inefficient monopoly” in the nation after the public school system.

That description is unlikely to change, unless someone comes up with a pragmatic strategy to renovate it and make it more competitive for the 21st century and beyond, the Postal Service could vanish into the horizon of history much like another extinct method of mail delivery — the Pony Express.

Neil S. Friedman is Sheepshead Bites’ newest freelancer. Friedman is a veteran reporter and photographer, and spent the last 15 years as a features editor at Canarsie Courier. Aside from reporting, he did public relations work for brands including Showtime, The Rolling Stones and Michael Jackson. In addition to his reporting for Sheepshead Bites, Friedman will contribute occasional columns on life, culture and politics in Sheepshead Bay.