Dead Tree Edition asks the question “Do We Really Need New Laws To Get More Postal Employees To Retire?“. The short answer is no, but before we get to the reasons for that, let’s think about the question itself. It assumes that getting more postal workers to retire is an urgent goal.
The USPS needs to reduce its expenses to keep them in line with declining volumes and revenue. It would be nice if you could simply get rid of 20% of your staff and magically reduce your costs by 20%, but it doesn’t work that way. The USPS does not have 100,000 employees sitting in those mythical “standby rooms” day after day. What it does have is a network and workforce whose capacity greatly exceeds its current volume. There are certainly people who don’t have enough work, and expensive sorting equipment that sits idle. But simply eliminating people without redesigning your processes won’t save any money.
Consider the letter carrier craft. While the volume of mail letter carriers deliver has dropped sharply in the last few years, their actual workload has not. It takes about the same amount of time to deliver a thousand pieces of mail as it does to deliver 800- you still have to walk or drive the very same route in either case. As a result, letter carrier overtime has been climbing as carriers retire and aren’t replaced. The only option that would significantly reduce letter carrier workload is a fundamental change in the delivery process: five day delivery. Until (unless?) that happens, the fact is that delivery, which represents almost half of the USPS’s workforce, is actually understaffed.
There are similar issues in the mail processing and retail operations. Given a mainly full time workforce it’s difficult to fine tune staffing to fluctuations in volumes. Simply getting rid of an employee doesn’t save money unless the employee had no work at all. If he or she had 80% of a full workload, you still have to find someone to perform that work.
That’s why the USPS is consolidating processing plants and delivery units. As those processes continue and effect more offices, there will be the need to excess employees- but it isn’t going to happen all at once across the country- that’s why the PMG has said that early outs and incentives would be targeted, rather than blanketed.
Reducing labor costs is a two step process- first you figure out how to eliminate unnecessary labor- things like reducing delivery days, closing or consolidating plants and post offices, etc. Only when you’ve come up with a plan that actually reduces the amount of work you need to do, or eliminates inefficiencies in that work, do you get to step two- actually capturing those savings by reducing overtime and staffing. Worrying about getting people to retire before you’ve figured out how to get rid of their workload puts the cart before the horse.
As the USPS makes progress in redesigning its processes, there will of course, be a need to reduce staffing beyond natural attrition in various locations and operations. Dead Tree quotes Darrell Issa’s notoriously flexible attrition numbers- the USPS has either 100,000 or 200,000 excess employees, and has an attrition rate of one percent. I’m not sure where Darrell learned math, but just last month we reported that the USPS had reduced its career workforce by “22,334 employees over the last twelve months, from 595,316 down to 572,982, a reduction of 3.8%.” In other words, even without incentives, actual attrition is almost four times what Issa thinks it is. In less than five years the USPS would lose the 100,000 employees Issa thinks are excess simply by doing nothing.
The Dead Tree article also suggests that the USPS makes it difficult for employees to decide if they should take an early retirement offer. I’d certainly agree that the two months from the announcement of the latest VERA to the deadline isn’t a lot of time to decide your future but anyone eligible for the offer should already have been thinking about their retirement plans. The article asks “wouldn’t it make sense to provide retirement counseling without first making them commit to retiring?”. The answer to that is, of course yes. Which is why the USPS does provide “retirement counseling without first making them commit to retiring”. You can argue that the telephone counseling offered isn’t as thorough as it might be, but employees don’t have to “commit” to retire before they receive it.
In the first place, employees can always request an estimate of their pension at any time, without committing to anything. After reviewing the estimate, an employee who is pretty sure he or she is going to retire calls an 800 number to request a full retirement package and counseling session. Only after receiving a personalized book with details of the individual’s retirement options, and completing the telephone session, does the employee decide whether or not to sign the papers and retire.
(I retired just over a year ago, and I can attest that the retirement estimates I received beforehand were accurate. The “estimated” annuity payments I received for the first couple of months were a bit stingy, but by the fourth month I was getting the correct amount. The telephone counseling session was somewhat “scripted”, but that’s exactly as it should be- the person at the other end of the phone line didn’t know me from Adam- she was strictly going by the records she had in front of her. She was meticulous in guiding me through all of the steps I needed to complete. When it comes to a momentous decision like retirement, I’d prefer someone reading from a script to someone making it up as they go along. She answered all my questions- what more could you want?)
There is certainly room for improvement in OPM’s processing of annuity applications- but that’s a government-wide problem, not a postal one. It isn’t uncertainty about the exact amount of their annuities that holds people back- it’s uncertainty about how they’ll get by on their annuities. A clerk or carrier who gets to the minimum length of service and retirement age under Civil Service would get about half his current salary, not counting overtime. A FERS employee would get much less. Add to that the fact that many employees’ Thrift Savings Accounts were badly affected by the recession and the market crash, and it’s easy to see why people might not rush to take an early, deeply discounted (2% per year) retirement. A lot of folks who take early retirements do so on the assumption that they’ll supplement their annuity with a part time or full time job. Until the job market improves, that will be a risky bet.
We don’t need new laws to get postal workers to retire- we need laws that would allow the USPS to streamline its operations, while at the same time leveraging the unique assets it has- a universal delivery network, a physical presence in just about every town in America, etc. And we need Congress to relieve the USPS of politically inspired burdens like the trust fund payments. Cutting $5.5 billion a year in bogus charges wouldn’t solve the USPS’s problems, but it would buy it time to implement the fundamental long term changes it needs, while normal attrition and targeted VERAs gradually reduce staffing.