United States Postal Service Going Bankrupt

Topics: Term, Mail, Finance Pages: 2 (747 words) Published: April 4, 2012
Michal Yehudah, USPS Assignment draft 1.The USPS is currently drowning in a astonishing amount of financial debt, that is threatening the survival of the federal agency. The USPS is aware of its badly broken business model and is in the process of a strategic restructuring of the agency as a whole. The agency is suffering because it has been unable to meet its budget since 2006, and has been in a deficit borrowing money from the US treasury to make ends meet. Exhausting their debt this year, there’s a lot of politics on what should be done to prevent a shut down. Its clear that with the increase of technology and e-mail usage comes decreases in postal parcels and revenue. However the USPS also highly depends on the revenue of express mail which have dropped over 20 percent and even more since the recession. The one thing that postal workers are carrying enough of is junk mail which accounts for a large percent of daily parcels. The ratio of junk mail to regular mail is 3 to 1 in terms of revenue. Another one of many problems is that the history of the USPS has shown to put the interest of its unions first. Examples of this is in March it reached a four in a half year agreement with the American Postal Workers Union extending the no-lay off provision and providing workers with a 3.5 percent raise over the period of the contract. This one action further set back the budget of the USPS and will heavenly impact the other 3 unions who’s contracts expire this year. 2. The biggest stumbling block the USPS is facing will be restructuring the agencies technology and salary/benefits within limited time and revenue. The USPS has exhausted their credit across the board and is looking for a bail out. The politics behind the bailout is so controversy that the Democrats are in favor of the unions because of their political relationtionship to the...
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