Monthly Archives: March 2012

How Misinformation is Bad News for USPS

It’s surprising to see all the ‘news analysis’ that spotlights similarities between the financial troubles of the USPS and the US Government as a whole.

The trouble is that most of the analogies just aren’t true.

Yes, it may be true that the US Government does spend more than it receives, has not really made significant cuts to its large workforce, and hasn’t made full use of technology to drive down costs.

But none of those things are true about the US Postal Service.

As discussed in more detail in a previous post, the financial problems of the USPS are tied to a Congressional mandate that requires the USPS to pre-fund its healthcare insurance for future retirees at a draconian rate amounting to $5.5 billion per year.

Why all the misinformation?  By mis-stating that the USPS has more expenses than revenues, the analyst is trying to make an argument that the USPS is bloated or defunct, and needs cuts or face bankruptcy.

But when all the facts are presented, it becomes clear that the problem can be solved by addressing the Congressional mandate.

By ignoring this fact, the analyst draws us to the wrong conclusion.  And deprives us — leaders and voters — of the information that we need to guide us to the right solution.

From my brief look around, I’ve come up with four common arguments that ‘analysts’ make about the USPS financial problems where they conveniently leave out the facts about the Congressional mandate.  The motives for leaving it out could be expedience or ignorance; although, as you might sense in the last argument, politics could also play a role.

Here are those four arguments:

USPS as Microcosm of US Government

“Both USPS and the federal government have failed to adapt to changing times. The explosion of affordable information technology and Web-based communication tools have revolutionized the private sector, boosting productivity and allowing for leaner, more dynamic organizations. But the labor-intensive Postal Service business model has changed little over the decades, and the federal government shows a similar unwillingness to change how it does business.”  Postal Service problems a microcosm of entire government (3/18/2012: Federal Times)

The Federal Times article above is a good example of ‘news analysis’ that uses the “USPS/US-Govt” analogy but mis-states the facts along the way.  Not only does it not mention the Congressional mandate, it is plain wrong about USPS technology development and workforce trends.   Fact is the USPS is a leader in updating its facilities with computers and automation; and it has been steadily downsizing its workforce for years.

A Demand Problem

“In a time where instant messaging, texting, and email allow us to communicate across the globe in a matter of seconds, the idea of sitting down to write a letter seems foreign to many. And the USPS is feeling the heat, so much so that it is headed for default later this year unless Congress lends a helping hand.”  U.S. Postal Service nearing bankruptcy as email asserts its dominance (9/2011: Yahoo Technology Blog)

The Yahoo article also glosses over the facts to make its point (‘alas, tech beats the USPS’).

Yes, we now communicate electronically and this has impacted USPS revenue.  But the USPS has addressed those issues by driving down its costs proportionally.  The missed fact is the Congressional mandate, and that $5.5 billion item makes all the difference.

A Labor Problem

“During the past four years, the (postal) service lost $20 billion, including $8.5 billion in fiscal 2010. Over that period, mail volume dropped by 20 percent.”  Postal Service proposes cutting 120,000 jobs, pulling out of health-care plan (8/11/2011: Washington Post)

Even the venerable Washington Post published this article that neglected to mention the Congressional mandate.  Instead, it painted USPS financial woes based on unyielding labor unions.

The Bailout

“Americans deserve an efficient USPS that delivers for decades. But misguided action – or none at all – could saddle taxpayers with a multi-billion dollar bailout for the Postal Service. The clock is ticking…”   Saving the Postal Service (US Congress -Committee on Oversight and Government Reform)

Unfortunately, even Congress is providing us with misinformation on their Saving the Postal Service website.  Some in Congress have failed to admit that the Congressional mandate was misguided.  In fact, they’ve taken the position that reworking the mandate would be akin to a government bailout.

The analogy?  Let’s say that Congress writes a law that makes you pay 25 years of tax payments over the next 5 years.  Then, say you’re having trouble making those payments.  You go before Congress to ask for help, and they call this “saddling taxpayers with a bailout.”

Restructuring the Congressional $5.5 billion per year mandate is the responsible thing to do.

Calling the mandate a ‘bailout’ is simply a way to create excitement and get voters to look your way.  It’s doubly pernicious when Congress itself is a big source of the problem.

Yes, the USPS is confronting a bunch of challenges.  Revenue has dropped and so, expenses need to continue to drop as well.

But we as American citizens, or at least as USPS customers, need to understand the facts before we develop our opinions.  When we get our facts from biased sources,  we’ll probably arrive at biased solutions that don’t solve our problems, and are more likely to make things worse.

And here is where an analogy does exist between USPS problems and our US Government’s problems:

There are undoubtedly some tough conversations ahead as we American citizens write our country’s next chapters.  We need to become very good at understanding the big picture so that we aren’t easily misinformed, and misdirected, by those with a narrow interest.

Misinformation is a problem for the USPS simply because it could lead to a bad solution.  At a time when we Americans can’t afford any more of those.