For years now, the United States Postal Service has been in serious financial trouble due to the advances in Internet communication and competition from businesses like FedEx and UPS. Because former customers can now pay bills and communicate with friends with a device like a prepaid phone, the Post Office has been losing a lot of money on postage.
There have been several cost cutting measures implemented in order to keep the struggling company afloat. Many career positions have been terminated, there has been talk of transitioning to a shorter delivery week, and closed down several branches of operations. Now the USPS is looking to stop paying into their retirement accounts in order to stay above ground for a couple more years.
The Postal Service has been putting $115 million into the Federal Employees Retirement system every two weeks since the 1970′s, while maintaining employee deductions into the fund. According to The New York Times, there is a $6.9 billion surplus in the fund because the Postal Service has been overpaying the fund. By taking a break from paying into the system, the Post Office can allocate money to other areas they need to pay into.
Most agree that the retirement funding slash isn’t a stable solution for the Post Office to continue its operations. Instead of simply cutting out money from their retirement fund, they need to get a better grasp about what goes on in the warehouses, post offices, and mail routes across America. The employees of the Post Office were promised certain benefits when they signed contracts to work. Union representatives need to collectively bargain and get to the bottom of the retirement investing freeze.
Democrats in Congress and postal regulators both agree that refunding retirement money back to the Post Office is the best decision to make. While they might be owed those funds back, there is no denial that it is only a short term solution. According to Ed O’ Keefe of the Washington Post, transferring the funds back to the Post Office would require the government to start taxing citizens more or borrow money from China.
While technology and competition are harming the post office, bad management and clumsy hiring practices are draining the remaining resources from the business. By running things more efficiently, cutting out all of the red tape involved with the agency, and hiring more diligent workers would cut costs and make it easier to pay retirees. Ultimately the Post Office needs to act like a real business instead of as an arm of the government.
