Government Business : An oxymoron — Government postal business
Posted on Wednesday, August 30, 2006
Newspapers will be stuck with an enormous rate increase next year for mail delivery because the postmaster general doesn't want his child to have to work for a mere $ 36 an hour.
OK, maybe that's an overstatement. But, based on his own words, that would be an easy conclusion to draw.
Postmaster General Jack Potter was speaking to a group of 50 state press association executive directors and presidents at a postal summit called by National Newspaper Association President Jerry Reppert Aug. 11 in Washington, D. C.
Potter told us it is labor driving up costs for the U. S. Postal Service.
And labor accounts for 76 percent of USPS costs.
"We lose money on every piece," he said, and the USPS has no choice but to pass on those costs to their customers.
Potter said sample studies show it takes 8 1 / 2 seconds on average for a postal clerk to put a newspaper into a mail slot, and the average postal worker is paid 1 cent every second. Once you add the labor costs of all the others who handle the paper, as well as overhead expenses - well, the rates we newspapers are paying now just don't come close to covering the cost of delivery for our products, especially in county.
The USPS expects to raise rates overall by about 8 1 / 2 percent. But the rates for local delivery of newspapers will be raised roughly three times that - 25 percent or more - in 2007.
Then he said something unintentionally revealing when he asked rhetorically," Would I want my child working for that ?"
To Potter, the biggest price increase in history is justified not because the postal service is doing a better job (it isn't ) but because postal workers deserve higher wages. That 1 cent per second wage - which calculates to $ 36 an hour or about $ 75, 000 a year - just isn't high enough.
General Potter's statement demonstrates how hopelessly out of touch he is, living in the Beltway where bureaucrats make decisions daily involving billions of dollars of other people's money.
Someday, Potter told us, it will be a machine placing our newspaper in the slot. Indeed, he has already eliminated 100, 000 jobs in the Postal Service in the past six years. New automation systems are expected to further reduce the number of postal employees.
Once more machines and fewer workers are handling our papers, then maybe our costs will go down, he said, but in the meantime, those postal workers still around think they're underpaid.
Other factors that could influence how much the rate will increase include a sweeping postal reform bill now before Congress and a lawsuit filed on behalf of periodicals publishers challenging the accuracy of the sampling method used to determine the cost of delivery.
Strangely, the unions are "negotiating"with a guy whose comments at the summit suggest he already agrees with them that they are under-paid, this in an industry in which workers have historically made one-third more than those in comparable private sector jobs. What kind of negotiating position is that ?
By almost any measure, delivery of newspapers in the mail is getting worse across the country. Peter Fox, the Wisconsin Press Association executive director, told summit speakers that newspapers in his state are seeing steady erosion in circulation attributable directly to poor delivery service. Fox said even longtime, loyal readers are dropping their subscriptions because they can no longer count on getting their papers.
The sentiment was universal. In fact, I was disappointed that the main issue of the summit - the looming rate increase - was hijacked by the issue of poor service.
The publishers'pent-up frustration came boiling to the surface when the postal officials dared to boast about improved service.
I tried to argue the point. I said the reason we aren't yet worked up over the rate increase is only because it hasn't yet been implemented.
That will change once we start getting calls next year from readers angry about the higher rates - which we will pass on to subscribers.
But the group maintained that declining reliability of delivery poses a more immediate threat to our industry – a point I could hardly debate.
Mr. Potter is deluding himself. This is not how real businesses treat customers. Although the USPS is now "privatized " (since 1970 ), all that really means is that it is out from under the direct supervision of Congress. Today's USPS offers the worst of both worlds, public and private; it is a bloated bureaucracy that doesn't have to answer to government and a protected monopoly that doesn't have to answer to customers. The Postal Service is no business. It is government impersonating a business. Without a clue. David Cox is president of the board of directors of the Arkansas Press Association and editor at Areawide Media in Salem.
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