U. S. Postal Service in Default

This past Wednesday, the U. S. Postal Service (USPS) defaulted on $5.6 billion owed to the U.S. Treasury for future retireee health benefits.  USPS owes another $5.5 billion in September.  At this time, USPS may not be able to meet other obligations, such as a payment for worker's compensation.  There are also billions in interest payments that USPS owes the Treasury.  USPS is heading for bankruptcy if Congress does not help this quasi-government agency.  There is a postal overhaul bill that is stalled in Congress.  However, there isn't much chance Congress can do anything to help the agency at this point.  Congress is more interested in passing bills to name post offices after friends, family or colleagues than actually try to fix the problems of USPS.

When I worked for USPS, there were always fears of talk of privatizing the postal service.  Back in those days, UPS and FedEx would have gladly taken the high density markets from USPS.  But, nobody wants to take the USPS mission;  deliver mail to every mail address in the USA.  Today, that kind of talk continues.  But, there is little chance anyone would want to buy the USPS.  With the advent of technology, businesses and individuals are finding easier and faster ways to send their communications in today's world.  You may say, but there are always going to be a need to send packages, flats (large manilla envelopes) medicine, etc.  But, USPS can't possibly survive on that type of business alone.  Believe it or not, the so-called "junk mail" was absolute gravy to the postal service.  But, business mailers are finding faster and cheaper ways to advertise these days.  Why send a business flyer with USPS, that might find its way into a mailbox in 3 or 4 days, when you can send an email with the same information to an email address?  The cost for the latter is next to nothing.  Business and personal mail is virtually a relic of the past.  Many, if not most, bills are paid online or by electronic payment to the bank. 

The postal service, as we know it today, is basically gone.  The days of employees making $20-25 an hour will end when current employees with 10 years or more service either retire or are laid off.  If USPS goes bankrupt, that invalidates all union contracts.  Then USPS can do as they wish with employees.  That is a fearsome thought for many postal service employees.  The future USPS employee will be a temporary employee, with no benefits, making half of what permanent employees make today.  This is bad news for those who had wished to make the USPS a career. You might want to consider another career option.  This bad news scenario is coming whether we want to think about it or not. 


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