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This isn't quite true; the USPS was formed in 1971, out of the United States Post Office Department.[1] It didn't '[scale] from nothing'. The USPS also enjoys

by nickff 5y ago

This isn't quite true; the USPS was formed in 1971, out of the United States Post Office Department.[1] It didn't '[scale] from nothing'. The USPS also enjoys a monopoly on mailbox deliveries, as well as price protections, in the form of a floor imposed on potential competitors. This doesn't seem particularly admirable. [1] https://en.wikipedia.org/wiki/Postal_Reorganization_Act https://en.wikipedia.org/wiki/Postal_Reorganization_Act

claudiulodro 5y ago
However, on the flip side, they are not really allowed to shut down unprofitable service areas in the middle of nowhere and are required to pre-fund retiree benefits to a greater extent than other organizations.
- deleted 5y ago
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- flutas 5y ago
  > are required to pre-fund retiree benefits to a greater extent than other organizations Because other companies can simply cut the benefits, USPS cannot. The best explainer I've seen is here: https://www.forbes.com/sites/ebauer/2020/04/14/post-office-pensions--some-key-myths-and-facts/?sh=2d451e447f5d https://www.forbes.com/sites/ebauer/2020/04/14/post-office-p... > ALL companies are required to fund any pension promises they make to their employees. (...) NONE of them are permitted to take a “pay as you go” approach but must contribute to a pension fund an amount equivalent to what a worker has accrued that year in benefit promises, regardless of how far into the future that worker will be retiring, and must make up for any shortfalls due to asset losses or other reasons. The USPS and private sector companies use the same general actuarial principles to do so, though there are differences in assumptions, particulars of the calculations, etc. > What is distinctive about the USPS is that, a a result of the 2006 Postal Accountability and Enhancement Act (PAEA), they are also required to pre-fund their retiree medical promises. However, what is also distinctive is that any private-sector company may simply cancel its retiree medical benefits at any time; the funding requirement for the USPS exists because only an act of Congress would enable them to cut these benefits. > However, even here, again, all companies which promise retiree medical benefits must account for them in their financial reporting even if they don’t prefund. As well as this line when discussing the USPS Fairness Act, which would eliminate the pre-funding requirement. https://about.usps.com/news/delivers-facts/usps-delivers-the-facts.pdf https://about.usps.com/news/delivers-facts/usps-delivers-the... [PDF Warning] > passage of the bill will not reduce our underlying retiree health benefits liability, nor improve our cash flow or long-term financial position.
Spooky23 5y ago
In exchange for that monopoly they have a universal delivery mandate. Amazon pays them $3 to essentially tape a $10 bill to parcels and deliver them to rural communities. It’s a vital service like mass transit or roads.
rhinoceraptor 5y ago
They also have a number of competitive disadvantages, they have to pre-fund their pension plans, as well as the fact that they are required to service remote addresses that private companies don't, since they aren't profitable. And that's not even touching on the point that looking at the postal service as a private business is completely asinine. No one looks at the military or schools as a private business that needs to make a profit.
voakbasda 5y ago
The USPS probably would not survive in its current form in a free marketplace, where competitors could obtain equal access to mailbox deliveries. If they did survive, the service would become a pale imitation of its current offerings, because there would be an exodus of customers eager to try a viable alternative. Anecdotally, I would be among the first in line to dump them, just as I would choose to dump every government monopoly if I had such a choice (e.g. fire, police, etc.). You know, the way things were back when citizens had a modicum of actual freedom, rather than the constant gaslighting that attempts to redefine our modern cultural slavery as "freedom". Everything the government touches turns to the worst possible kind of shit.

by nickff 5y ago

claudiulodro 5y ago

However, on the flip side, they are not really allowed to shut down unprofitable service areas in the middle of nowhere and are required to pre-fund retiree benefits to a greater extent than other organizations.

deleted 5y ago
[deleted]
flutas 5y ago
> are required to pre-fund retiree benefits to a greater extent than other organizations Because other companies can simply cut the benefits, USPS cannot. The best explainer I've seen is here: https://www.forbes.com/sites/ebauer/2020/04/14/post-office-pensions--some-key-myths-and-facts/?sh=2d451e447f5d https://www.forbes.com/sites/ebauer/2020/04/14/post-office-p... > ALL companies are required to fund any pension promises they make to their employees. (...) NONE of them are permitted to take a “pay as you go” approach but must contribute to a pension fund an amount equivalent to what a worker has accrued that year in benefit promises, regardless of how far into the future that worker will be retiring, and must make up for any shortfalls due to asset losses or other reasons. The USPS and private sector companies use the same general actuarial principles to do so, though there are differences in assumptions, particulars of the calculations, etc. > What is distinctive about the USPS is that, a a result of the 2006 Postal Accountability and Enhancement Act (PAEA), they are also required to pre-fund their retiree medical promises. However, what is also distinctive is that any private-sector company may simply cancel its retiree medical benefits at any time; the funding requirement for the USPS exists because only an act of Congress would enable them to cut these benefits. > However, even here, again, all companies which promise retiree medical benefits must account for them in their financial reporting even if they don’t prefund. As well as this line when discussing the USPS Fairness Act, which would eliminate the pre-funding requirement. https://about.usps.com/news/delivers-facts/usps-delivers-the-facts.pdf https://about.usps.com/news/delivers-facts/usps-delivers-the... [PDF Warning] > passage of the bill will not reduce our underlying retiree health benefits liability, nor improve our cash flow or long-term financial position.

Spooky23 5y ago

In exchange for that monopoly they have a universal delivery mandate. Amazon pays them $3 to essentially tape a $10 bill to parcels and deliver them to rural communities. It’s a vital service like mass transit or roads.

rhinoceraptor 5y ago

They also have a number of competitive disadvantages, they have to pre-fund their pension plans, as well as the fact that they are required to service remote addresses that private companies don't, since they aren't profitable. And that's not even touching on the point that looking at the postal service as a private business is completely asinine. No one looks at the military or schools as a private business that needs to make a profit.

voakbasda 5y ago

The USPS probably would not survive in its current form in a free marketplace, where competitors could obtain equal access to mailbox deliveries. If they did survive, the service would become a pale imitation of its current offerings, because there would be an exodus of customers eager to try a viable alternative. Anecdotally, I would be among the first in line to dump them, just as I would choose to dump every government monopoly if I had such a choice (e.g. fire, police, etc.). You know, the way things were back when citizens had a modicum of actual freedom, rather than the constant gaslighting that attempts to redefine our modern cultural slavery as "freedom". Everything the government touches turns to the worst possible kind of shit.