If you've been reading the newspapers with any care over the past week or two, you undoubtedly have noticed articles about the worsening finances of the United States Postal Service, which is projecting a $7 billion loss for the fiscal year. Mail volume has dropped 12.6 percent over a nine-month period, continuing a sharp decline that began in 2007. See articles here, here, and here. (And if you want a longer treatise, albeit a somewhat dated one, on the U.S. Postal Service, see here.)
Sharply declining mail volume is not the only source of the Postal Service's financial woes. Most of its financial problems are tied to labor costs, especially billions of dollars in required payments to prefund future retiree health benefits. That's okay. Lots of businesses, including public utilities, have to prefund future retiree health benefits. Joe Nocera, in a fine column in Saturday's New York Times, pointed out a special absurdity of the Postal Service's situation. Discussing the financial pressures of the USPS, Nocera wrote:
Totally crazy. Why is that? Because Congress controls the Postal Service, and members of Congress are craven and self-interested. They're cowed by the postal unions.