Snail Mail Spam Subsidies Stuttering Towards A Stop
Published on: September 8, 2011
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  • Anthony

    Coincidentally, just left local USPO; long lines and inefficient service was my experience (just one anecdote though may not have general applicability). While in line, I wondered whether postal employees were responding in own way to bleak news over last several days – my impression is that many Blue Model employees are unaware of factors generating structural change.

  • Anthony

    “…and so land ultimately on the dumb lowest rank, who with spade and mattock, with sore heart and empty wallet, daily come in contact with reality, and can pass the cheat no further” – elegy for USPS?

  • GA Dean

    Interesting that the “snail mail” system requires government intervention to keep prices low, but that likely electronic replacements really need help getting prices up! We’ve demonstrated that a free service will be abused; the ISP’s report that over 80% of all emails are fraudulent, and a system that generates no revenue doesn’t attract investment.

    A true replacement for paper-mail will need to be dependable and trusted, and it will need a sufficient revenue stream to assure investment and maintenance. Likely that will mean that the senders should bear the costs (as they do with postal mail) but who is going to make that happen? Especially as the Government is betting on the survival of the USPS?

  • Jim.

    So is low morale and impending layoffs the reason why the state paperwork I had to file recently (that isn’t available online) took so long to get to me, and why the curbside pickup service in my area is spotty at best?

    I hope USPS isn’t counting on a monopoly service with various government agencies to keep it going. What a disaster that would be, for everyone concerned.

  • WigWag

    As is often the case with Professor Mead, this post is heavy on the hyperventilation and light on the analysis. But also as usual, there is an interesting point that he makes if you are tenacious enough to wade through the muck and find it.

    Professor Mead is absolutely right; the Post Office epitomizes everything that’s wrong with applying 18th century strategies to 21st century realities. But his claim that the post office exemplifies the blue state model at its worst is simply wrong.

    The USPS was founded in 1792 and Benjamin Franklin was one of our first Postmaster Generals. Professor Mead knows history well enough to understand that every state was a “red” state back then. There were virtually no federal regulations to speak of; income redistribution as a feature of government was nonexistent; pensions didn’t exist and neither did fringe benefits; there were no unions and no one expected to serve in the same job for the rest of their lives unless they were farmers. In 2011 the postal service provides essentially the same kind of service it provided in the 18th century.

    As labor practices evolved in the rest of society they did so as well in the postal service. Postal employees are not particularly well paid and their fringe benefits and pensions are similar to the compensation packages received by government workers not only in blue states but also in red states.

    In fact, it’s not just new technology like email that makes the postal system economically unviable, it’s the legal requirement to serve small, sometimes tiny rural communities often located in red state America. If the postal service could close most if not all post offices in rural communities and could stop providing services outside of large cities and suburbs, many of the financial problems of the postal service would be ameliorated. One of the main reasons this type of reasonable reallocation of resources is impossible is because red state legislators in the southern, mountain and prairie states refuse to hear of it. They insist that their constituents must be served even if there are few of them and they are so geographically dispersed that serving them is prohibitively expensive.

    So as is so often the case with Professor Mead he hides a scintilla of facts within a mountain of misrepresentation.

    In fairness, the problems of the post office are not unique; Amtrak is another perfect example of red state legislators insisting on a nonviable economic model to benefit a tiny number of people who happen to be their constituents. There is a perfectly viable business model to be found in transporting people by train between Boston and Washington, D.C. as long as the only stations served are: Boston, New York, Newark, Wilmington, Baltimore and Washington, D.C. Whether the train serving this route is owned and operated by a private provider or the federal government is largely irrelevant.

    In fact, it is entirely possible that long distance train service taking New Yorkers, Pennsylvanians and Washingtonians to Southern Florida might also be economically viable. What destroys the economic viability of the model is the requirement for the train to make stops in backwaters in rural Virginia, North Carolina, South Carolina and Georgia. Currently Florida bound trains from New York make scores of stops in those four southern states.

    Why is that? The answer is simple, rural residents in the South insist that they are entitled to Amtrak Service regardless of what subsidies are required and the legislators who represent these red states refuse to support Amtrak funding unless their spoiled, red state constituents get their way.

    The Post Office and Amtrak are but two examples where the impossibility of reform can be laid mostly at the feet of red state legislators and their constituents.

    But I won’t hold my breath waiting for Professor Mead to extend his Jihad against blue state America to the target most worthy of his contempt. After all that target is his ancestral home.

  • bobby b

    “But is it really bad news that millions of millennials won’t have to work 40 years doing mind-numbingly repetitive tasks in factories?”

    Well, yes, in a way it is, if those millions lack the intelligence and/or ambition necessary to think up a new profit-making business on their own.

    Sad fact, I know, but millions of people doing boring, repetitive, mindless tasks for hourly pay really are working at the limit of their own capabilities. Boring mindless sorting and lifting and clerical jobs replaced the boring mindless factory jobs which went away when the factories closed down. Those factory jobs had replaced the boring mindless stoop labor of farming just as millions of those jobs disappeared with the advent of farming machinery.

    We do need a certain proportion of boring mindless repetitive low-skill jobs if we want to be able to keep large parts of the populace employed. We could replace that class of labor with a huge welfare class and simply accept that there’s nothing useful that we can find for such people to do, but I think society stays healthier if they are employed, have to work for their living, and feel as if they are contributing members of society.

    Not that I’m advocating for higher subsidies for the USPS – but boring mindless work still has its place.

  • John

    The sooner the USPS gets liquidated the better. Every time I’ve gone there in recent memory the lines are long and the service stinks. UPS, FedEx, or another new company would fill the void, and do it better. Some people would hate being forced to make the transition, but in the end, everyone but spam mailers and Netflix would be better off.

  • Toni

    “Missing the $5.5 billion payment due on Sept. 30, intended to finance retirees’ future health care, won’t cause immediate disaster.”

    Can’t remember the details, but it took a GOP WH and Congress in the 2000s to force the USPS to start making the payments instead of letting the obligations remain unfunded.

    “…allowing the post office to recover billions of dollars that management says it overpaid to its employees’ pension funds.”

    Color me skeptical that “management” has been “so prudent and far sighted.” So is “the Obama administration [which] has signaled discomfort with the pension proposals, questioning whether the postal service really overpaid.”

    “The large, unionized workforce used to provide job security to workers and a stable team of well trained and reliable workers for managers.”

    Hmmm. My best friend’s mail is delivered by an incompetent; the neighbors know each other from trading mis-delivered pieces of mail. The guy leaves packages out in the rain.

    He lived on their cul-de-sac. Neighbors breathed easy for a couple of years while the guy was disabled. NOT. He got caught doing what he wasn’t supposed to be able, and was fired. NOT. The union got him rehired.

    He’s been with USPS for ~20 years. He may well survive the coming layoffs. Hmpf.

  • wdk535

    Buddy of mine works at the post office. He says the junk mail is what keeps them alive.

  • glenn

    The only problem with this story is that there are a lot of mindless people in the world and they need jobs too. And if you put them in positions that require use of brains they’ll F it up. Daily, Often, and not be smart enough to even realize they made a mistake. I don’t see a way out of this one guys.

  • Richard

    Up until two months ago, I have resisted online banking. Then, my excellent mailman retired (obviously for reasons listed in this article and his legs going creaky on him) and USPS closed two mail sorting facilities and consolidated its operations. Since then, four checks I sent went missing costing me the price of an Amazon Kindle in late fees and interest penalties. That’s it, game over.

  • Squid

    WigWag writes: Whether the train serving this route is owned and operated by a private provider or the federal government is largely irrelevant.

    I find it deliciously ironic that one who so crudely criticizes the author can write such words of his own. One of the major points being made in discussions of the Post Office or Amtrak (or any other GSE, for that matter) is that business decisions are being made for political reasons, resulting in unsustainable operations.

    A private postal service, like a private railroad, a private mortgage lender, or a private health care provider, would be able to make sensible business decisions. It wouldn’t deliver mail to far-flung rural residences; it wouldn’t stop in every flyspeck village along a rail line; it wouldn’t lend money to those unlikely to pay it back; it wouldn’t offer one-size-fits-none policies that cover every politically favored condition under the sun.

    I really don’t give a rat’s ass whether you’d like to blame red or blue politicians, when the simple matter is that the system itself is set up to be influenced by these political actors with their parochial interests, and that the system itself cannot survive such perverse incentives much longer.

    I fully expect rural red representatives to squeal loudly as their oxen get gored. Don’t care — I ain’t paying for their toys any longer.

  • CatoRenasci

    Mead is right that the Post Office has become a bizarre, inefficient, featherbedded mess. He is also right that bulk mail is heavily subsidized, meaning the taxpayers pay to lower advertisers costs. That might have made sense at one time, but no longer.

    It seems to me, however, that the subsidy for delivery to out of the way locations is probably justified. Rural areas need delivery, and are often least in a position to pay the premium that covering the full cost of delivery would require.

    Would it make more sense to subsidize the private carriers by reimbursing them for delivery to otherwise unprofitable rural areas?

    Other ways to look at it would be to return, for rural and other hard to reach areas, to part-time post offices/workers of the sort one saw in country stores 100 years ago and more, where there was a corner of the store where one could send and received mail. Perhaps not a complete or perfect solution either, but worth considering.

  • John Burke

    Hey, maybe environmentalists will figure out that the millions of tons of junk mail winds up in landfills or generates lord knows how much carbon to pick it all up for recycling — not to mention the cost to local governments.

    After decades if buying stuff, my wife and I get hundreds of catalogs and flyers in the mail every week. These days, it all goes directly from the mailbox to the trash.

  • Joe

    For Sale: 1 green mailbox. Only used to collect junk mail Monday through Saturday. Little red flag hasn’t moved in years – may need lube. Could be repurposed to store floppy disks, CD’s, vinyl records, 8-track tapes or cassette tapes……..

  • Homer

    My contention is that USPS will never completely go away because there is s need for it. That said, there is ample reason it will undergo massive changes.

    Information moves quite well electronically, certification, not so much; until encryption and electronic document certification becomes commonplace there will be a need to move paper in at least a semi-secure fashion. That does not mean that only USPS can successfully complete that task.

    I can easily foresee USPS resources halved, delivering physical mail M-W-F to one set of addresses on a 6-hour-day schedule, T-Th-S to another set. To support that junk mail and a lot of advertising mail will have to go by the wayside, and first class rates will have to rise – and be established as a long-term plateau (one thing that has driven businesses away from USPS is the inevitability of perpetual tri-annual increases in first class rates).

    Change is forthcoming whether the participants like it or not and, at the moment, they have the choice as to whether they would like to manage that change or have it forced upon them.

  • Master of Disaster

    US first class mail is much cheaper than in Europe, where the postal services were allowed to modernize many years ago. The restriction on USPS not raising rates beyond the rate of inflation should be lifted. 80 cents or more for a first class stamp is not unreasonable.
    The USPS should also be allowed to charge a small monthly fee for home delivery ($5?) collected annually. Delivery of mail is a basic government function that needs to be retained.

  • Craig

    Our postman would occasionally bundle up an entire street’s mail and shove into one person’s box, so the homeowner would walk around and deliver it instead. He was finally caught stealing gift cards from letters and so was fired.

    I went on vacation and when I went through my mail found that 95% of it was useless advertisements and the other 5% could have been delivered either electronically or through Fed Ex. You have to wonder about an organization who’s purpose is to deliver garbage to people who don’t want it. Unfortunately until the current generation of senior citizens pass away, the post office will continue on.

  • James Bradley

    To: bobby b: Let us assume our fellows are not morons. Let us assume instead that deprived of easy slogging, any of them might rise above an otherwise plain existence and thereby be freed to make for us unexpected benefits.

  • PapayaSF

    I agree with the overall thrust of this piece, but in some ways it’s a misfire from the usually top-notch Mr. Mead. WigWag made a few points, but my point is that the idea that the “spam” is subsidized is precisely backwards. Unless things have changed in recent years, it’s the advertising mail that subsidizes first class, not the other way around. Yes, a flyer or catalog may cost less to mail than a first class letter, but they are prepared in huge bundles that can be handled in a very automated way. It costs the USPS much more per piece to handle a vacation postcard or a birthday card from the grandchild.

  • Herb

    All too true. The USPS should be done away with. A couple of examples may suffice to make my point, and I am sure anyone could add his own examples.
    First, a neighbor and I have lived here for 25 years, and we still get each other’s mail. It happens all the time.
    I ordered a couple of books from Barnes and Noble 13 days ago. The order was sent USPS from a B&N warehouse about a 25 minute ride away. It has still not arrived. Again, quite typical. This could not happen with UPS or Fed Ex.

  • Mastro

    I remember when junkmail flyers came out in the ’70’s- the mailmen hated walking to each house so much sometimes they would “miss” a street or tow and throw away the left over mailers. A friend’s uncle was almost fired for doing that.

    Basically that’s the only think keeping them afloat- even my retired mom pays her bills online now.

    They have to give up the rural routes and maybe deliver mail only 4-5 days a week. Do we really need mail every day? I don’t. If a business needs that service- they can pay for it.

  • I stopped going to my local post office and began using a mail box hosting center as the USPS personal were inefficient and actually rude when it came to mailing parcels to my son in Afghanistan.

    The premade boxes(by the USPS) that fold together have a campaign slogan…if it fits it ships are not perfect boxes. Sadly the mid size box had gaps in the lid-production error…my friendly USPS workers pulled out rulers and measured and ask me to repack. I did, once again not acceptable. Then they packed the parcel…gaps still there- so their solution? Not allow me to mail it. I took the unaccepted parcel to the mail center…they charged me the flat rate-mailed it and my son received it.

    For the record…I never used USPS again. My local mail center is willing to pack the items and never blink. Oh and the boxes are always safely packed and arrive with all contents.

    Seems so easy to be considerate…

  • Bart Hall (Kansas, USA)

    I have a short letter, written to my mother by my father when in Washington on Navy business back in 1954. It said, in part:

    “Meet me tomorrow (Thursday) at the 12:30 train [in New Haven].” It was postmarked at 3 PM, **Wednesday**, and my father was utterly confident she would have it in the next morning’s mail delivery in a small town some distance from New Haven.

    The letter bore a 3-cent stamp (in today’s money, 25 cents), and the USPS made a decent profit.

    How’d they do it? Well, in DC Union Station and the main Post Office were adjacent, intentionally. All non-airmail letters were sorted into three categories: north, south, and west. Bags of those letters were loaded onto trains headed in the appropriate direction and the secondary sorts were taken care off alone the way.

    Bags were dropped off in Baltimore, Philadelphia, Newark, New York, New Haven, Providence, and finally Boston. Bags were dropped off and picked up at the smaller stations without even having the train slow down.

    The guys sorting mail on the train actually knew regional geography well enough to sort things quickly almost a decade before ZIP codes. They and their antecedents had been doing it for three generations. Like their forbears, most wore .38 revolvers to discourage train robbers.

    In the main postal hub at New York they sorted other bags for New Haven, Providence, Philly, Baltimore, DC and so on, as well as “points south [of DC]” and “points west [of NYC]” You can extrapolate the system to Chicago, and so on.

    What happened? In part, volume. The USPS was handling vastly more mail in 1975 than in 1955, with much of the increase being printed matter of all sorts.

    The other thing that happened, frankly, was affirmative action. Beginning in 1977 the USPS was required to “diversify” its work force. The last mail train out of DC departed in June 1977. All sorting thereafter occurred in large urban stations, to be shipped by truck.

    For the first time, theft of mail *within* the postal system became a larger problem than that of external robberies.

    Things have only worsened from there.

  • Mark B

    I am not sure if @WigWag is purposely missing the point to try to draw people off the scent or is so blinded by partisanship that he doesn’t *know* he is missing the point.

    Let me summarize for you in a way that you can’t miss, WigWag: the “Blue Model” is a proxy for services that are beholden to extensive political entanglements.

    It doesn’t matter whether the USPS is delivering to Red States, Blue States, or Mars; it matters that where they deliver is determined by politics – a point that you even make while entirely missing the larger one. In addition, politics determines *when* they deliver, *who* they use (Union Employees), and the terms of employment and retirement.

    This is the model whose inefficiencies and failings Prof. Mead has carefully illustrated. Your “point” (I use the term loosely) that Red State politicians play the game too or that the USPS was started by Benjamin Franklin has nothing to do with anything. In fact, Mead hasn’t even mentioned “Red States” or talked about a “Red Model” here (or elsewhere to any great degree).

    Professor Mead isn’t on a “Jihad against blue state America” (your term), he is simply illustrating that the model implicit in Democratic, blue-state politics – as described above – doesn’t work anymore and that a new model needs to be developed.

    Finally, your approach to his analysis – which was needlessly inflammatory, personal and provocative – just validates his overall point in this series. It appears that you believe that “debate” is synonymous with a smear and that winning consists of “taking out” those who would oppose the naked power politics of the Blue model. That isn’t exactly how you’ll win friends and influence people among the readers of the American Interest.

  • ChrisGreen

    Agree sort of with Wig Wag. Disagree with Bobby B.

    Even below average intelligence people often work at far under their capacity. I’ve met people who weren’t good at math or programming, but I have met very few people (who weren’t drug addled) who lacked basic intelligence in order to figure out ways of doing complex tasks easier and faster. The great limiting factor at my work among workers on the factory floor is NOT intelligence. It is that the jobs are so boring and repetitive that the workers stop paying attention to the details. Suddenly we have 1000 devices built without reagent because Joe wasn’t paying attention to the indicator because joking around with Sally and taking lots of breaks (in order to break up the day) is so much better than staring at that stupid indicator light. The situation is more complex than this, and there are other factors involved, but, by and large, I think many people need to work at jobs that are more complex and require more creativity.

  • Mike

    “We do need a certain proportion of boring mindless repetitive low-skill jobs if we want to be able to keep large parts of the populace employed. We could replace that class of labor with a huge welfare class and simply accept that there’s nothing useful that we can find for such people to do, but I think society stays healthier if they are employed, have to work for their living, and feel as if they are contributing members of society.”

    This is absolutely correct. The left-hand side if the bell curve isn’t going away. In fact, it’s probably growing relative to the right-hand side.

  • Pashley1411

    Simply a harbringer (or canary, if you will) of every government agency you know of or come into contact, research and military included.

    Wigwag wants to round up red-state lawmakers and constituents as unindicted co-conspirators when the blue-state agencies start to list. Blue-state lawmakers can’t budget, or prune, or evaluate, or focus, and somehow its everyone’s fault, in a game of political projection. When its time to take the fall, the political class claims they are one of us.

  • Steve

    Good grief. “Red staters” are to blame for the demise of USPS and Amtrak? What about the thousands of tiny communities in IL, IN, MI, OH, PA, NY, VT, NH and ME? Check your detailed atlas. And BTW, UPS and FedEx seem to be able to deliver and pick up in those areas and still make money. Amtrak loses money on every single passenger. On the NEC, its because of the cost of keeping the track in a state of good repair. Outside the NEC it is overall cost of transportation. Both versions are money loosers (as is air travel subsidies), and I love Railways (but I’m honest about the costs of passenger service).

  • Koblog

    Think 1955: no EPA, no departments of Education, Energy or HUD, no space program, no Great Society welfareism.

    How much educating does the Department of Education do? How much energy does the Department of Energy produce? Do we need them? And how many jobs will Obama’s proposed Department of Jobs produce?

  • Frank D

    The Post Office, at the beginning, was a great way to combine real estate, labor, systems and organize the flow of information.

    Now, the PO in Soho became an iconic Apple Store.

    As a RE man it always amazed me to see how poorly the PO utilized its SFage. And the same is true of the people who worked there for decades with no human advancement. And how poorly the precious commodity of its citizen customers were treated. I become nervous whenever an internet supplier uses the USPS, for good reason.

    It’s a sign of poor governance in the US, blue and red, that more has not been done to bring the USPS into the modern world. Now it is way too late.

    The sooner it disappears completely the better.

  • DonM

    So the USPS can continue to simulate contributing to national prosperity, we just have to pay their workers and managers in simoleons.

  • DonM

    The major problem with the USPS is its monopoly. It has no need to compete, because noone is permitted to compete. All other services have to distinguish themselves from mail.

    The world is a wonderful place. Everything works beautifully except government.

  • Toni

    A few more points. First, this is yet another case of denial. Spam mail has kept the USPS on life support for years as the volume of snail mail declined. This “bankruptcy” was highly predictable and should have been planned for years ago.

    From the Times story: “Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors.” UPS is unionized, but with a much less lavish pay package. Fedex isn’t — though not for lack of Dem & Labor trying.

    Mike referred to the left hand side of the (IQ) bell curve. Charles Murray and Richard J. Herrnstein addressed this issue in their 1994 classic The Bell Curve: Intelligence and Class Structure in American Life. Blacks’ IQs are *on average* slightly lower than whites, so of course the authors were lambasted as racist. But their point (among others) is one of the very points Dr. Mead makes. Society has to find somewhere for people of average or lesser intelligence to work.

    They didn’t, but I will add “somewhere other than the USPS and other government unions.”

  • WigWag

    “Good grief. “Red staters” are to blame for the demise of USPS and Amtrak? What about the thousands of tiny communities in IL, IN, MI, OH, PA, NY, VT, NH and ME…? And BTW, UPS and FedEx seem to be able to deliver and pick up in those areas and still make money.” (Steve, September 9, 2011 at 2:07 pm)

    Fed Ex charges $10.37 to deliver a two ounce letter from midtown Manhattan to Columbia, South Carolina within 3 days; the distance is about 720 miles. The United States Postal service charges .44 cents.

    Fed Ex charges $10.37 to deliver a two ounce letter from Columbia, South Carolina to Rocky Mount, North Carolina with a guarantee of delivery within two business days; the distance is about 255 miles. Without the guarantee, the USPS charges .44 cents.

    That’s why Fed Ex, UPS and other shippers can profitably serve rural communities while the USPS can’t.

    I wonder how the Senators from North and South Carolina would react if the USPS decided to raise its prices for mail between the Carolinas to in excess of $10.00 for a two ounce piece of mail.

    Of course you are right, Steve, we could play the same game with a blue state like Vermont.

    The point is that Professor Mead is incorrect when he accuses the Post Office of operating under the blue state model; it is operating under a model that has been in existence long before anyone thought of dividing states by their political perspective into red and blue regions. He is also wrong when he implies that blue states are any more in favor of subsidizing an outmoded model than red states are. The more urbanized the state, and the greater the population density, the more economically viable the current USPS model is. That model breaks down particularly badly in less urbanized states. Those less urbanized states tend to be red states although there are a few exceptions.

  • teapartydoc

    I agree with Mark B’s analysis of Wig Wag’s [approach]. The reason red state legislators insist on Amtrak coming to their home towns is because the blue staters insist on keeping this mastodon alive and want red state money to run the respirator. They aren’t going to keep the little red (blue?) engine going without votes from the red staters on appropriations bills and those aren’t in the offing without service. It has nothing to do with whether or not the service is necessary or desired. This is just another reason the blue model is breaking down.

    I’m going to make an anecdotal point for WW but I don’t expect him to get it. I ran into an old nurse today that I used to work with in a little rural hospital many years ago. It was a great place to work and had the best administrator I’ve ever worked with. It was a county hospital and provided a great deal of charity service, but was still profitable. The fact that it was owned by the county meant that various politicians sat on the board. The bankers, real estate people, lawyers and politicians on the board saw that they might be able to come out a little richer if they facilitated a turnover of this asset to a big non-profit conglomerate (yes, they exist), and proceeded to try and do this over the heads of that administrator and the medical staff. In the hullabaloo that followed, the administrator resigned and the deal fell through. The little hospital then went through a series of loser administrators and ended up being accepted out of receivership recently. The point I made to the nurse was: if it was a bad idea to have politicians on a hospital board, what makes people think we should have them running all of health care? She and her whole family are Democrats. I’ve never had her agree with me more strongly on anything before. The blue model is doomed.

  • WigWag

    “From the Times story: “Labor represents 80 percent of the agency’s expenses, compared with 53 percent at United Parcel Service and 32 percent at FedEx, its two biggest private competitors.” UPS is unionized, but with a much less lavish pay package. Fed Ex isn’t — though not for lack of Dem & Labor trying.” (Toni; September 9, 2011 at 4:00 pm)

    I am afraid this information is incorrect. UPS is one of the most heavily unionized companies in the United States and its not just some puny union that we are talking about; UPS workers are represented by the Teamsters. The Teamsters are far more aggressive that the United Postal Workers Union or any of the other postal unions representing USPS employees. UPS workers have extremely generous fringe benefits, they have a pension system that is envied by many and their unskilled labor is highly paid by any standard. Nevertheless, UPS is a highly profitable company.

    It is also incorrect to say that Fed Ex is not unionized. Fed ex sorters and drivers are not unionized but Fed Ex pilots voted to join the Airline Pilots Association several years ago. The result is that Fed Ex pilots are the highest paid pilots in the industry. Back in 2006, shortly after the union was formed, Fed Ex Pilots signed a contract that paid the most senior pilots flying the largest aircraft more than $206 per hour.

    Here’s an article from 2006 that documents this point,

    One of the features of the blue state model that Professor Mead talks about quite often is the same feature that he blames for the nonviability of the USPS; he blames many of the system’s problems on the unions.

    His view is uninformed. The two major competitors to the USPS pay high wages, generous fringe benefits and have generous retirement programs, yet unlike the USPS they manage to thrive. The real difference is that Fed Ex and UPS charge as much as 25 times more to mail a two ounce letter as the postal service does. If UPS and Fed Ex had to deliver two ounce envelopes to any home or business in the United States for .44 cents, their business model wouldn’t be viable either.

    Of course if the USPS tried to raise their prices to even 50 percent of what Fed Ex and UPS charge, the public would be outraged and commentators like Professor Mead would cite it as just more evidence of the failure of the blue state model. Obviously it will never happen because if the postal service tried to raise rates that high, red state legislators and blue state legislators alike would act to prevent the rate increases.

    Unlike UPS and Fed Ex, the postal service does have hundreds of thousands of employees that it no longer needs. A majority of those extraneous employees work in post offices that remain open because red state legislators refuse to let them close (at least so far).

    By the way, we’ve seen this type of red state hypocrisy before and it’s not just with Amtrak. Red State Senators and Representatives love to complain about out of control and wasteful federal spending. But just a few years back, when it was recognized that the Department of Defense operated scores if not hundreds of unneeded military bases, depots and forts, Red State representatives did everything in their power to prevent military bases recommended for oblivion by the Base Closing Committee from actually closing.

    Wanting to get something for nothing is as American as apple pie but the yearning to receive services that you don’t pay for seems much more deeply rooted in red states than in blue states.

    Mark B (September 9, 2011 at 12:57 pm) says,

    “It doesn’t matter whether the USPS is delivering to Red States, Blue States, or Mars; it matters that where they deliver is determined by politics…”

    That is true; the USPS delivers everywhere and the fact that they do is determined by politics. If they tried to stop delivering to rural communities or decided to charge more to deliver to rural communities, politicians would prevent them from doing so. That is equally true of politicians from red and blue states. With red state politicians supporting a non-sustainable business model for the USPS as vigorously (or more vigorously) than blue state politicians do, Mead gets it exactly backwards. We shouldn’t be defining the USPS as a blue state disaster; we should be defining it as a red state disaster.

    But I do think that Mark B is right about one thing; perhaps I was a little hard on Professor Mead. After all, he’s been schlepping all over the world; he’s jet lagged; he had the wits scared out of him by flying on a Russian aircraft and now he has to trudge up to Bard and confront a student body so liberal that Mead must look to them like the embodiment of Dick Cheney. In light of this I shouldn’t have been so hard on him.

    In a feeble attempt to make it up to Professor Mead, I’ve done some deep thinking in the effort to come up with a theme song for Via Meadia. In light of the Professor’s tendency to perseverate on the blue state model, I thought that perhaps he would enjoy this rendition of what he could make the theme song of his very enjoyable blog.

  • tom swift

    Unfortunately for these sorts of analyses, UPS and FedEx ain’t really that great. For the last five years or so I’ve had notably better success (that is, higher percentage of completed deliveries without loss or destruction) with the USPS. On the other hand, I could never get the USPS to deliver my house tax bills to my house. The town mailed them to the address on the town’s engineering maps. The PO couldn’t find the address, so they’d bounce them back as undeliverable, and I’d be stuck with the late fees. There are only two houses on the entire street, and the PO couldn’t find mine. Go figure. So I finally got the town to change the address it was using. Impossible though it is to argue with City Hall, it’s child’s play compared to getting a sign of intelligent life out of the PO. Maybe it really is a semi-nonfunctional dinosaur whose time has finally passed.

  • jeannebodine

    Anecdotal evidence from the 2 government employees closest to me. One is a lifelong friend and works in IT at a regional IRS office. She works 4 9-hour days but works from home 2 days a week. Thing is though she only has dial-up internet service so she can’t get a connection to the office. And no one notices. Or cares.

    The other is a relative who works for the National Science Foundation in DC. She is such a difficult person that she is unable to work with anyone. Therefore, she is given NO WORK at all. None. She spends the day on the internet and conducting personal business. Her superiors have found it less disruptive to just to leave her be.

    Both have been with the government for 20+ years. A these are just the 2 closest to me. I spend a lot of time in Arlington, VA so I have many more anecdotes, including the occasional, rare story of an excellent worker. But as everyone tells me, good workers get frustrated quickly and are “persuaded” by co-workers & union reps not to upset the status quo. There is no way this system adapts or improves unless it blows up and begins again from scratch.

  • “The special relationship with the government used to be a strength; now it is mostly a weakness: irrational congressional mandates and regulations tie it down in red tape.”

    You’re exactly right about this. Sometimes I think Congress is trying to bankrupt the Postal Service. Get rid of the funding mandates, allow 5-day delivery, and let unprofitable centers be shut down and replaced with alternative options, such as postage facilities inside of grocery stores or other private businesses. I hope the USPS does not collapse, because I think it will cause a huge ripple effect throughout the worldwide economy.

  • James Kaplan

    I think talking about “Blue Social Model” may be somewhat out-of-date. It accurately describes the industrial Northeast/Midwest of 1975. It accurately describes Michigan or Washington DC of 2011.

    It doesn’t well describe NY, San Franscisco, LA or other commercial centers of 2011. I would suggest that these places have developed a “Blue Prime” social model, with the following characteristics.

    1. Entrepreneurial, non-bureaucratic entities (e.g. Goldman Sachs, Google, hedge funds) generate huge amounts of economic value.
    2. Various political jurisdictions tax value created to distribute to (and through) large bureaucratic entities. In some cases, the economic value redistributed can be more than half the total, when you take into account corporate income taxes, personal taxes, sales taxes, etc.

    On the face of, you would thing that Blue Prime is a highly unstable model. However:
    1. “Blue” cities like NY, SF, CHI seem able to at least retain high degree of economic activity — you don’t see hedge funds moving to Texas.
    2. Many of people providing the economic value seem personally invested in the “Blue Prime” model, contribute to candidates who wish to protect it, etc.

  • PapayaSF

    The “Blue Prime” model in SF is headed for trouble: within five years the city government will be spending about 1/3 of their budget on benefits for current and retired employees. Not salaries or education or infrastructure, just health and retirement benefits.

  • Toni

    WigWag wrote on September 9, 2011 at 10:53 pm

    “UPS is one of the most heavily unionized companies in the United States and its not just some puny union that we are talking about; UPS workers are represented by the Teamsters.”

    Yes, but as the Times stats show, their compensation doesn’t burden UPS as heavily.

    “Back in 2006, shortly after the union was formed, Fed Ex Pilots signed a contract that paid the most senior pilots flying the largest aircraft more than $206 per hour.”

    Your link says “highest paid” only in the headline, nowhere else.

    That’s beside the point, though. UPS joined the Teamsters in 1918 and has suffered several costly strikes. Fedex pilots, and only the pilots, joined a union only five years ago. Hence labor consumes over half of UPS’s budget but only a third of Fedex’s.

    Your comments focus on the USPS’s mandate to serve every hamlet in America — its mission for over two centuries. What does that have to do with spam mail versus snail mail? Its union has ferociously fought and is still ferociously fighting any changes whatsoever.

    Far-sighted management and far-sighted unions — and the board of governors — could have been working with Congress for years to downsize the mail carrier service while still providing mail and package service to every burg. That is, while continuing to fulfill its original mandate.

    Under a new price structure, to be sure. But this day has been coming for a couple of decades. The union approach has been “NO NO NO NO NO. We’ve got ours and it’s a sweet deal. We want to keep it.” Not so different from the UAW and teachers’ and other civil service workers’ unions.

    You can’t blame Red States for union obstinacy and short-sightedness.

  • Ken carr

    You do not realize that BHO will merge the post office and socialized healthcare into the same, existing government post offices – left line, postage needs; right line govt sponsored primary care providers. Leverage existing assets.

  • JLK

    Mr Kaplan

    Love the expression “Blue Prime”. A new high (low?) in Lib euphemism.

    Have to tak exception with your “facts” though. Texas has a large and growing Hedge Fund sector. They are smaller than the NE’ers only because they are newer.

    As for co’s like Goldman being big wealth builders think again. The vast majority of their biz is in derivatives meaning “zero sum”. For every $ Goldman makes someone else loses that dollar (with the exception of their brokers of course)

    Within a very short period your “Blue Prime” ciies will become the financial world’s equivalent of the rust belt.

  • Joseph Somsel

    There’s the underlying business model to explain some of the problems.

    USPS has a universial service mandate. It used to have a monopoly on all such deliveries so could cross-subsidized services. Most of the expenses of the “system” are embedded overhead. the marginal cost of sending a first class letter is much less than the price of the stamp.

    Express packages could contribute more to overhead to allow rural and first class prices to be low.

    What FedEx and UPS, et al did was skim the high revenue business, leaving low margin services to support a large, mostly irreducible overhead.

    Once you busted the monopoly, the demise was inevitable.

    But, yes, the USPS could be run more efficiently and with greater competitive flair and success.

    Besides, I’ve just discovered the joy of sending post cards and what will stamp collectors do if the USPS folds?

  • Terry_Jim

    When I was a child, the garbage men walked 100 feet up our driveway and dumped our garbage cans into the plastic cans they then carried on their shoulder back down to the truck. Those days are long past.
    Why does the mailman still have to walk up to each house in so many older neighborhoods?
    Because postal regulations forbid switching delivery modes to cheaper curbside or cluster boxes. Change that, change internal measurements that require a network of processing facilities that are only used 6 hours a day, close half of the processing plants, end the plan to fund 50 years of retirees health benefits in 10 years(this is NOT pension funding), and you could keep 6 day delivery. 5 day delivery happens 10 holiday weeks a year already, the USPS doesn’t save money those weeks-judging by the overtime that I work.

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