A New Agenda for Postal Reform

SteveBlog, Slideshow

By Steve Hutkins

In late June of this year, a few days after the new Postmaster General took office and in the middle of a pandemic, the Postal Service initiated a plan to eliminate 64 million work hours, the equivalent of 33,000 jobs. It was one of the largest cost-cutting plans (perhaps the largest) in the history of the Postal Service, and leadership wanted to get a good start on it by the end of the fiscal year on September 30 — and without telling anyone about it, including the Postal Regulatory Commission, which is supposed to review all such plans.  Within weeks, unprecedented mail delays were occurring across the country, members of Congress were hearing about post offices closing early, and — given that half the country may vote by mail — even the integrity of the election was threatened.

The response was swift. People protested in the streets, Congress held hearings and issued a damning report, and a dozen lawsuits were filed, leading to injunction after injunction banning the operational changes. The leaders of the Postal Service were forced to step back. But those in charge are still in charge, and the Work Hour Reduction plan is just on pause, waiting until after the election.

In the meantime, there’s a crisis at the Postal Service. As of mid-September, almost 10,000 postal workers had tested positive for Covid-19, and over 52,000 had taken time off because they were sick or had to quarantine or care for family members. Those numbers are obviously much higher now, and they will get worse over the winter. Overtime hours, rather than being reduced, have gone way up, from about 11 percent of total workhours before the pandemic to 17 percent during the week of October 2 and 21 percent during the week of October 9.

The surge in packages caused by the pandemic is taxing the capacities of the system, resulting in continued delivery delays. First Class mail, which normally has an on-time delivery target of 96 percent and an average score of 92 percent, has been averaging about 85.6 percent since early July. When the quarterly results are posted next month, the fourth quarter of 2020 (July-Sept) may be the worst since the Postal Service first started reporting service performance data back in 2009.

The processing scores for Election Mail per se (explained here) also show signs of problems. As discussed in this OIG report on the 2018 election, processing plants are capable of achieving an on-time score of nearly 100 percent.  Recent on-time scores had been improving — 94.2 percent for the week of Sept. 12, 97.2 percent for the week of Sept. 19, and 97.9 percent for the week of Sept. 26 — but then for some reason they fell to 92.1 percent for the week of Oct. 3.

The problems at the Postal Service, coupled with the President’s comments attacking the post office, have made many people afraid to cast their ballots by mail, even though it may be the only safe way for them to vote. Just a few days ago, the states suing the Postal Service in Pennsylvania v DeJoy decided the situation was so bad that they’ve asked the court to appoint former Inspector General and BOG member David C. Williams to serve as a special monitor to oversee operations until the election.

Hopefully in January a new administration will take office in Washington. How will it deal with this crisis, and how might it envision the future of the Postal Service?

First principles. The Postal Service is not just a business. Its purpose is to provide a service to the nation. It is “the people’s post office” — we own it, and it works for us. As with other public infrastructures — the network of roads and highways, our parks and schools, water and electricity utilities — the postal infrastructure should not be asked to pay for itself. To do so limits the potential benefits it can provide. We should not succumb to the scarcity myth that the Postal Service has a broken business model and can’t afford to do anything but downsize. We should instead recognize that the postal infrastructure is an opportunity multiplier that expands the capabilities of individuals and communities. Investing in the Postal Service stimulates local economies by providing quality jobs that have been a gateway into the middle class. The economic and social benefits provided by the Postal Service are incalculable. 

Emergency relief. In August the House passed a $25 billion funding bill to support the Postal Service during this emergency, and a similar bill was put forward in the Senate. The Trump administration opposed these bills and agreed only to provide a $10 billion loan in exchange for giving Treasury Secretary Mnuchin more control over postal policies. Emergency funding will help the Postal Service continue its work of delivering essentials like medicines and relief payments throughout the pandemic, maintain high on-time delivery standards, and ensure the safety and health of postal workers. The Postal Service’s long-term financial liabilities for pensions and retiree health care can be addressed at another time; they cannot serve as the rationale for cost-cutting during a national emergency.

A Presidential Commission. We should create a new presidential commission to analyze the postal landscape, study innovations, welcome suggestions, and make recommendations. It would be similar to the previous postal commissions and task forces of 1967-68, 2003 and 2018, but it would have a different set of priorities. Rather than focusing primarily on how to make the Postal Service operate “more like a business,” this commission would examine innovative, creative ways to help the Postal Service serve communities and create local and national resilience. Rather than being composed primarily of corporate executives (as has been the case with every previous commission and task force), this commission would include a broad spectrum of stakeholders — elected officials, mailers associations, postal workers, advocacy organizations, and consumer groups.

Saying no to privatization. Much of what has passed for postal reform in the past has amounted to little more than encouraging, in the name of “efficiency,” more piecemeal privatization: replacing post offices with postal counters in big box stores, “workshare” discounts that transfer about $15 billion worth of mail processing work to presort companies and consolidators, and contracting out over $10 billion to the private sector for transportation and other services (among the top contractors are FedEx, UPS, and the logistics companies on which Mr. DeJoy built his fortune). Such reforms enrich private businesses at the expense of the public realm. Privatization will inevitably mean higher rates and reduced services, especially for rural areas, and the foundational principle of “universal service” will be jettisoned.

The workforce. The recurring complaint about the Postal Service is that there are too many postal workers and they get paid too much. In fact, as indicated by the growth in overtime over the past few years, there are not enough postal workers, and an increasing number of them are now non-career workers who don’t get paid enough and consequently have a high turnover rate. Rather than looking to cut costs by replacing good postal jobs with underpaid workers within the organization and in the businesses to which postal work is outsourced, we should recognize the value of creating and sustaining middle-class jobs with good wages and benefits for families and communities. The culture of the workplace needs to improve, with more attention to worker safety, improving morale, empowering postal workers to play a larger role in self-managing operations, and ensuring that employees are free to talk to the media without fear of disciplinary action.

More Transparency and Accountability. Instead of handing over control of the Postal Service to a handful of executives and political appointees, we should create a more democratic governance structure in which citizens have more influence. The governance should be more responsive to the needs of the country as a whole, and its decision making should be more transparent. While management needs flexibility to be effective, it is even more important that major changes in postal operations and governance be subject to extensive review by regulators and the public. We need to learn from what happened this past summer, when major changes were made without review by regulators, stakeholders and Congress.

Post offices. The local post office is not a store or a retail outlet. It is an all-important node in the postal network and often the heart of a rural community or urban neighborhood. Once we recognize this fundamental purpose, we can begin to understand how to develop and enhance the local post office in ways that extend the reach and potential of the network. At the very least, legislation should make it more difficult to reduce window hours and close post offices (including contract post offices). The Postal Service should also place a high priority on its role as steward of historic post office buildings and the art many of them contain. These buildings belong to the American people, and they should not be sold to the highest bidder for the sake of short-term revenues. (See the ACHP’s Preserving Historic Post Offices: A Report to Congress,)

Supporting local communities. The postal infrastructure already supports local communities in numerous ways, but this function can be greatly enhanced by having post offices offer other services, like public internet access where broadband is limited and by using excess space in postal facilities for activities like food banks and employment services. As suggested in the 2015 OIG report on The Postal Service’s Role in Delivering Wellness and Supplies, the USPS could partner with wellness organizations to put health kiosks in post offices, have letter carriers alert health providers about people in need, prioritize the function of postal worker as “eyes on the street,” and deploy postal workers to help with contact tracing in pandemics. There are also ways for the community to help support the Postal Service: working with postmasters to address local needs, doing joint programs, even simple things like planting flowers around the post office.

Consumer access and experience. Most people know the Postal Service through postal workers, post offices, collection boxes, and their home mailbox. Greater attention needs to be given to improving rather than diminishing these contacts. The Postal Service should not remove collection boxes or make pick-up times more cost-effective but less useful for consumers, or shift home delivery to inconvenient cluster boxes, or reduce the number of clerks at post office windows so that wait times in line grow longer, or close post offices at lunch or earlier in the day — the only time when many people can go there. And let’s put a suggestion box in every post office so that people can help the Postal Service learn more about what each community wants and needs. (The USPS does have a website where you can submit your suggestions online.) (For more, see the OIG’s What America Wants and Needs from the Postal Service.)

Links to government. For many people, the post office and postal workers are their main link to the federal government. This connection can be expanded by providing E-gov services at post offices, as discussed in the OIG’s e-Government and the Postal Service — A Conduit to Help Government Meet Citizens’ Needs. The Postal Service could also help promote voter registration at post offices, locate secure ballot boxes at postal facilities, and provide more support for voting by mail. Post offices could also help administer government programs like Medicare and Social Security. Congressional appropriations should be available for responsibilities like expeditious handling of mail ballots and helping with the census.

A Greener Postal Service. The Postal Service has a highly developed sustainability program, but it needs to do more energy-saving and green projects. It should expand the fleet using electric vehicles. It could provide electric vehicle recharging stations at its parking lots and encourage smart, connected technologies such as distributed energy generation and storage. It could put solar panels on the roofs of the buildings the government owns, as it did at a processing center in Los Angeles, and it should provide incentives for postal lessors to do so as well. We need to change the accounting methodologies that block the Postal Service from implementing such projects simply because the payback time is more than a year or two. The Postal Service should also do more to address concerns that too much of what comes in the mail is wasteful. Other countries don’t have this problem because their postal systems do not give steep discounts for direct mail marketing pieces the way we do.

Postal banking. Providing communities with basic financial services like cashing checks and making payments should not be an opportunity to generate profit, particularly when it means exploiting low income households, rural residents, veterans and families of active duty personnel, and people who live in underbanked neighborhoods. Instead of being forced to turn to predatory services, families should have easy access to traditional basic banking services and safe financial alternatives. The Postal Banking Act proposed by Senator Kirsten Gillibrand, with the support of Senators Bernie Sanders and Elizabeth Warren, would establish a nonprofit postal bank that offers low-cost checking and savings accounts, ATMs, mobile banking, and low-interest loans. (See this OIG report and a recent article from the Center for American Progress).

New revenue and innovation. Postal reform needs to take the handcuffs off the post office. The Postal Service should be authorized to offer more products and services that aren’t strictly postal. Post offices could sell office supplies, greeting cards, and gift cards, provide copying and fax machines, and offer packing services, as discussed in reports by the OIG and GAO. The Postal Service should explore ways to bridge the physical and the digital with hybrid technologies, notification apps, and smart post offices that offer a combination of online and offline services and that connect your smartphone to the post office. We could turn the postal fleet into a laboratory for unleashing tremendous knowhow, demonstration and experimentation, without requiring huge investment and risk. We could equip postal trucks with monitors to gather data on everything from potholes to pollution. The Postal Service could provide email accounts, offer an email address attached to your physical address, and find new ways to bridge the digital divide.

The package business. Despite what some critics and competitors may claim, the Postal Service does not use its monopoly powers to compete unfairly with the private sector in delivering packages. Rather, it serves as a deterrent to monopoly forces in an industry that is very lightly regulated. For much of its history, the Postal Service’s competitors have sought to limit its package delivery operations, from trying to prevent the expansion of parcel post in the early 1900s to lobbying for changes in the costing methodology in order to drive up parcel rates, as recommended by the 2018 Task Force. The Postal Service should have the resources it needs to continue to provide low-cost package delivery to every home and business in the country.

Postal rates. The rate system has become far too complicated, with too many subclasses, discounts, and confidential deals. We should simplify the rate system and cut back on the myriad discounts offered for presorting and worksharing (see this OIG report). We should also re-evaluate the system of Negotiated Service Agreements, which may be “good for business” but are not consistent with the transparency one expects of a government agency. Products (like Marketing Mail flats) that have not been covering their costs should be required to do so, and the rate system should provide more support (despite their own cost coverage issues) for mail that enhances public discourse by spreading information, like small-circulation newspapers, periodicals and library mail.

Service standards and performance. While the Postal Service has a very sophisticated system for tracking on-time performance and reporting to the PRC, it suffers no consequences for poor service. Policies and regulations need to prevent the steady erosion of service performance we have seen over the past few years and particularly over the past few months. The Postal Service should be given the resources it needs to meet its performance targets so that service standards actually mean something. (See Assessment of the U.S. Postal Service’s Service Performance and Costs, USPS OIG.) In order to make performance more transparent, there should be an online dashboard that shows performance scores in an easy-to-understand way, for each product, in each district, on a weekly basis. (The Postal Service has an online Retail and Customer Service Operations Dashboard, but it’s for employees and not available to the public.)

A Postal Citizens Group. Finally, we need a permanent organization to represent the interests of citizens and consumers in the same way the mailers associations and postal unions do. As described by Christopher Shaw in Preserving the People’s Post Office, this consumer organization would be able to hire its own experts, economists, lawyers, researchers, and lobbyists to represent the public interests before Congress, the Board of Governors, the Postal Regulatory Commission, and the judicial system. Such an organization could be independent of the government, funded by membership dues and contributions, or it could be part of the government, like the Bureau of Consumer Protection. This organization would help communities when they’re dealing with inadequate postal services and explore new ways for the Postal Service to fulfill its service mission.