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The US Postal Service Has Too Many Employees

24/7 Wall St. logo 24/7 Wall St. 8/8/2020 Douglas A. McIntyre

a man standing in front of a truck © Provided by 24/7 Wall St. The COVID-19 pandemic had little effect on the revenue the U.S. Postal Service (USPS) reported for the most recent quarter. However, the agency did lose $2.2 billion.

For the quarter, revenue was $17.6 billion, up by $547 million from that quarter in the year before. Expenses, however, rose as well. They were $19.8 billion, which was up by $477 billion. The USPS's loss in the year-ago quarter was $2.3 billion.

Unfunded liabilities for the quarter this year means the operating loss for the USPS was $1.5 billion, compared to $1.1 billion last year.

Revenue from first-class mail use dropped from $5.8 billion last year to $5.5 billion this year. This was more than offset by a rise of shipping and package revenue to $8.3 billion from $5.4 billion. Postmaster General and Chief Executive Officer Louis DeJoy commented: "Significant declines in our mail volumes as the result of the pandemic were largely offset by corresponding growth in our package business, but the reality remains that the Postal Service is in a financially unsustainable position absent significant fundamental change." The readiest change is a reduction in costs.

The USPS has 496,924 career employees and another 136,174 that it calls "noncareer" employees. It has 31,322 retail post offices.

The USPS continues practices that might have been valuable decades ago but no longer are. Mail is delivered six days a week. Many overnight packages are delivered by the private sector, particularly UPS and FedEx. The use of mail for private letters and communications has soared. So has the transfer of files over the internet. This includes important documents with verification and signatures. Postal delivery easily could be cut to three or four days. So could the number of days that post offices are open. The need for 31,322 retail post offices is long gone.

There has been a great deal of debate about the need for the federal government to step in and save the USPS from financial ruin.

DeJoy recently announced that the USPS would be reorganized. However, the changes were primarily along the lines of new management functions. The size of the organization was left unaddressed. These organizational changes do not initiate a reduction in force, and there are no immediate impacts to USPS employees. The announced management hiring freeze will have little effect on costs.

The USPS is set up for a delivery system across America that was needed long ago. It needs substantial modifications to operate profitably today. The federal government would not have to help financially.

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