MyGovCost News & Blog

USPS Loses $15.9 Billion – But Bosses Get Hefty Compensation Raises

Monday November 19th, 2012   •   Posted by K. Lloyd Billingsley at 9:01am PDT   •   21 Comments

In October we noted that the U.S. Postal Service (USPS) had recently defaulted on a $5.6 billion mandate to pre-fund retiree health benefits, the second time in two months the USPS had failed to deliver. In August it failed to make a $5.5 billion retirement prepayment slated for last September, which Congress conveniently deferred. We concluded that the USPS is a “certified deadbeat and also a big-time loser,” which has now been certified.

The USPS net loss last year was $15.9 billion, more than the $15 billion that had been projected, as Bloomberg News reports. As the USPS racked up losses, the volume of mail it carried dropped 5 percent. It costs some $250 million a day to run the USPS, which by the end of the fiscal year will have less than four days of cash on hand. The USPS is expected to lose $7.6 billion in the year that started October 1. But the massive and ongoing losses did not prevent the government from handing out compensation increases to USPS bosses.

As the Washington Times noted, the overall compensation of Postmaster General Patrick Donahoe rose from $384,229 in 2011 to $512,093 in 2012 on account of a $186,536 increase in his retirement account. All but one of the top five USPS executives received “hefty increases” in their retirement plans.

USPS bosses say they will never stop delivering the mail. Even so, the Coalition for a 21st Century Postal Service, warns that without action from Congress, “there could be postal slowdowns or shutdowns that would have catastrophic consequences for the 8 million private sector workers whose jobs depend on the mail.”

If the federal government is serious about reform, it should stop rewarding USPS executives for massive fiscal irresponsibility. The federal government should lift the USPS monopoly on first-class mail. Let the USPS compete with UPS, FedEx and other companies on that front, just as it now does in shipping. Competition will spur the reforms the USPS needs. Otherwise the federal government will continue to abuse taxpayers, and common sense, by keeping this $15.9 billion deadbeat loser afloat.



21 Responses to “USPS Loses $15.9 Billion – But Bosses Get Hefty Compensation Raises”

  1. Don says:
    November 19, 2012 at 11:08 am

    And those of us who are replacing the postmasters in small towns who retired...get paid $9.54 and hour – no benefits – 1 year no raise!

  2. Anthony b says:
    November 19, 2012 at 11:55 am

    Couldn’t agree more I work for them a letter carrier (18yrs+), and never have I seen such a poorly run company, and as far as bosses pay funny how we do the work and they get huge increases and bonuses.

  3. James says:
    November 19, 2012 at 1:34 pm

    I am not surprised. The USPS has fallen far downhill. I have a mail-lady who will swerve off the road to hit a trashcan. I’ve replaced 5 trashcans in 7 years. I have opened 3 complaint tickets with the USPS without getting a call back from a manager. Why will people use a company with such horrible service when there are accountable companies as alternatives?

  4. john says:
    November 19, 2012 at 4:37 pm

    Time to close it up.

  5. steve says:
    November 19, 2012 at 6:25 pm

    And we think the govt will be able to control health care?

  6. libertarian jerry says:
    November 19, 2012 at 7:11 pm

    The arrogance of the average postal employee is palpable. In fact,this is true with most government employees on most levels. Of course there are always exceptions. But it always comes back to the same questions. And these questions are: What is the proper role and function of government in today’s world? Why should these various government “jobs” exist in the first place? Why do we have to pay taxes for “services” of government that we neither need nor want or that could be done better and cheaper by the private sector? Why do we have to pay taxes or higher rates to support government employees that are,on average, paid twice what the average private sector worker is paid for doing the exact same job? I think the answer is political. That is most government employees (bureaucrats,teachers,administrators,postal employees,welfare “workers” and so forth) vote for politicians that will foster the continuance of their “jobs” whether necessary or not. Its the age old quid pro quo. The politician will protect your security if you vote to keep them in power. The sad part of the story is that now, partially because of this ongoing patronage, America is now bankrupt.

  7. USPS Loses $15.9 Billion – But Bosses Get Hefty Compensation Raises « lessbull.com says:
    November 19, 2012 at 7:41 pm

    [...] full post on MyGovCost | Government Cost Calculator November 20th, 2012 | Tags: .9, Billion, bosses, Compensation, Hefty, Loses, Raises, USPS | [...]

  8. The Truth says:
    November 20, 2012 at 2:05 am

    To let those folks out there who do not know about the following:
    USPS receives no Federal tax dollars for its operations.
    USPS parcels service volume is 20% increase than last year.
    What telling you is the USPS pricing is more affortable than the private sector and customers are loving it. Please check the pricing before you say something.
    The stamp is 45c now and will go up just only 1c next year. It is still the cheapest service compare other countries to mail a first class letter in the world. I hope the Postal Service can go up from 45c to $1 then the Postal service can get out the debt sooner. Since the Postal Service is an independent agent, not taking any tax payer money and the congress always control the pricing, its make very difficult to make profit. Do anyone recognize USPS spending a lot of money on very expensive gasoline to deliver mail to everyone’s door just by charging 45c per letter and no matter rain or snow......but people will not complain the cigarettes or beer going up??? :)
    By the way, I don’t think Postal worker is an over paid job. It is a hard job. If it is easy, everyone can do it. People just envy because it is a good job or those people don’t even have a job....?
    Action without study is fatal.
    Please study before you open your mouth.
    If you don’t, you just make yourself like a fool.

  9. USPS Loses $15.9 BILLION – But Bosses Receive Hefty Compensation & Raises « THE WAKING GIANT says:
    November 20, 2012 at 3:24 pm

    [...] READING: http://www.mygovcost.org/2012/11/19/usps-loses-15-9-billion-but-bosses-get-hefty-compensation-raises... 47.606209 -122.332071 Like this:LikeBe the first to like this. Categories: Miscellaneous Tags: [...]

  10. Terry Foster says:
    November 20, 2012 at 3:26 pm

    So the Postmaster General makes about the same as the President?

  11. Letter Carrier Chris says:
    November 20, 2012 at 4:17 pm

    Unfortunately Jerry, USPS workers are not paid by tax dollars. That was done with long ago when companies like USP and Fedex appeared and claimed it was unfair for the USPS to be supported by tax dollars. So let’s get the facts straight. Also if you think Post Employees make twice as much as the private sector, I would love to see someone in the private sector work as a letter carrier for just $27k/year.

  12. Fred Pottger says:
    November 20, 2012 at 6:00 pm

    The U.S. Postal Service is no longer staffed be people that really care about the job. The best people have to put up with a tremendous amount of crap from both management and the unions which in my opinion are part of the same team. Believe it or not the Postal Service is more than capable of making money, However when you remove the ” Sanctity of the Mail” and literally let your competitors control the logistics of your mail system that in my opinion is a big job killer. The balance between Good Workers, Good Unions and Good management is way out of whack. USPS in recent history racks up 20,000 EEO complaints a year. Are we delivering Mail or are we subsidizing the legal profession. The ratio of people that come to work as opposed to just showing up is also an issue. Good Workers burn out, management gets bonuses based on who knows what, and the union gives back everything that was won. Waste, Fraud, Abuse and corruption has literally destroyed our nation and maybe the world.

  13. Michael says:
    November 20, 2012 at 10:10 pm

    The USPS is not taxpayer funded. The losses are mostly due to a pre-funding mandate which requires future retiree benefits be funded 75 years into the future on a 10 year timetable. There is no other company or government entity in the country with this burden. The government actually OWES the USPS money, a lot of money but to repay it would show up on the books as deficit spending. The USPS is also one of the only government agencies authorized by the Constitution.

  14. Elizabeth Gonzalez says:
    November 25, 2012 at 1:19 pm

    I agree with your assessment of executive bonuses at USPS, but that point is true of most industries as well as government. It’s a separate question from the operation of USPS. But please note that USPS is not supported by your tax dollars. It is funded by postage.

  15. Dave says:
    November 26, 2012 at 1:43 pm

    The USPS does not receive any money from the Government to fund it’s operations. Yes, the Postal Service has a monopoly on first class mail, because BY LAW they are required to deliver to every address in the United States. Yes that means that your $0.45 stamp will get your letter delivered to Middle of Nowhere, Alaska the same as right next door. The Postal Service is a SERVICE, not a BUSINESS. It was never organized as a business. Drop the Pre-Funding rules that only the USPS has for the Pension fund, refund the USPS over-payments, and let them close some of the facilities.....wait Congress will not let that happen as those are jobs (good paying jobs) that they will lose.

  16. DMV Healthcare « lessbull.com says:
    November 26, 2012 at 4:24 pm

    [...] use the inefficient United States Postal Service as a warning. Krugman tellingly avoids the USPS, currently in the red by nearly $16 billion, and opts for the DMV, a concession that Obamacare will be a [...]

  17. Marilyn G. says:
    February 19, 2013 at 11:54 am

    The massive and ongoing losses did not prevent the government from handing out compensation increases to USPS bosses, but the USPS wants to cut Saturday mail delivery from the taxpayers. Something is wrong with this picture.

  18. Will Deadbeat USPS Take Saturday Off? | lessbull.com says:
    February 20, 2013 at 11:11 pm

    [...] hefty raises given to U.S. Postal Service bosses did not prevent losses of more than $15 billion last year. The postal bosses now want to reduce those massive losses by eliminating Saturday mail [...]

  19. Jeff Powell says:
    March 12, 2013 at 7:38 am

    Unlike other private businesses, the Postal Service is exempt from paying federal taxes. USPS can borrow money at discounted rates, and can condemn and acquire private property under governmental rights of eminent domain. The USPS does get some taxpayer support. Around $96 million is budgeted annually by Congress for the “Postal Service Fund.” These funds are used to compensate USPS for postage-free mailing for all legally blind persons and for mail-in election ballots sent from US citizens living overseas. A portion of the funds also pays USPS for providing address information to state and local child support enforcement agencies.
    Under federal law, only the Postal Service can handle or charge postage for handling letters. Despite this virtual monopoly worth some $45 billion a year, the law merely requires the Postal Service to remain “revenue-neutral,” neither making a profit or suffering a loss.

  20. Grapost says:
    April 9, 2013 at 9:46 am

    More Right Wing propaganda. Postal executives are not overpaid. They are grossly underpaid by private sector standards. Overall compensation of Postmaster General Patrick Donahoe rose from $384,229 in 2011 to $512,093 in 2012

    Compare that with what the CEO of UPS got. The CEO and chairman of United Parcel Service Inc. (UPS, Fortune 500), D. Scott Davis, made $10.7 million in 2010,

    And the FedEx CEO. The CEO of FedEx (FDX, Fortune 500), Frederick W. Smith, made $7.26 million in 2011, according to financial filings.

  21. David Theroux says:
    April 12, 2013 at 12:25 am

    Grapost, The USPS is a government created and protected monopoly controlled by government employee unions. In contrast to UPS and FedExp, the USPS will not take responsibility for the delivery or non-delivery of mail because its purpose is to reward monopoly wages and benefits (including pensions) to its members and bosses.

    If we are to assess the real value of any employee including USPS administrators, we would need to first eliminate the organization’s monopoly powers and see wages line up with the competitive market for labor services. As a “Left Wing Propagandist” and apologist for the USPS, you fail to make note of this obvious problem.

Leave a Comment

Twitter Facebook Youtube RSS

Search


By linking to Amazon.com from this page, The Independent Institute earns referral fees of 4% to 15% from whatever you buy. Bookmark the above link and you can support the Institute when you do your normal shopping!

Seminars
TIR

Recent Posts

Recent Comments

RSS Recent Posts on The Independent Institute’s Other Blog, The Beacon

Blogroll

Categories

Archives

November 2012
S M T W T F S
« Oct   Dec »
 123
45678910
11121314151617
18192021222324
252627282930