OPINION:
It’s not for nothing that the U.S. Postal Service has become every taxpayer’s idea of what inefficient, bloated government bureaucracies look like. Anyone who has stood in line at the post office for more than five minutes knows this to be true.
Louis DeJoy, the packing and shipping company executive whom then-President Donald Trump appointed postmaster general in May 2020, was supposed to be the man with the skills and expertise to set things right. Instead, he appears to have become a captive of the organization he was brought in to save.
A hybrid organization, the Postal Service is a government-sponsored enterprise that Congress wants to operate like a private corporation. While it does have a few private sector-like features, the Postal Service runs up annual deficits on a scale that would crush a real business.
It is admittedly costly and labor-intensive for the Postal Service to do what the law requires: provide mail and package delivery to almost every address in the United States, six days a week.
That’s not something private sector competitors such as UPS and FedEx are required to do.
Mr. DeJoy raised hopes and distinguished himself from predecessors by developing a workable plan to restore the Postal Service to financial viability over 10 years. He even persuaded Congress to endorse it after a fashion because it took a potential federal bailout off the table.
Unfortunately, his plans must be lost in a drawer somewhere in the L’Enfant Plaza headquarters building. The Postal Service’s financial performance over the last two years shows no sign of improvement, with billions in red ink accumulating quarter upon quarter.
Instead of cutting costs and generating efficiencies by partnering with the private sector wherever possible, Mr. DeJoy’s course of action looks more like empire-building. Considering that labor accounts for more than 70% of total Postal Service costs, the correct play is to allow things to “right-size” through attrition as the volume of mail going through the system continues to declines as the public uses text messaging and email instead of letters to conduct business.
Mr. DeJoy’s latest move converted 125,000 postal workers to full-time status, which the postal chief argues will stabilize the workforce and save money by reducing overtime costs. Combine this with spending billions to construct new, possibly redundant facilities, and the dream of true reform appears to be gone.
Economist Ed Hudgins suggests that instead of stabilizing the workforce, Mr. DeJoy should have called it “locked in as a permanent expense,” given that it’s “virtually impossible to lay off or fire permanent unionized employees when economic or technological conditions change.”
Judging by these actions, Mr. DeJoy has no intention of dismantling the Postal Service as his critics on the left have charged. Instead, he’s going too far in the other direction. Rather than take the tough steps needed to turn the Postal Service into a viable enterprise, the focus has been on serving the interests of the postal unions.
It would be better for Mr. DeJoy to remember his customers are those who use and pay for the Postal Service, not the institution itself, and to find those lost plans that would put the organization on a firmer financial footing.
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