Submitted by Tyler Durden on 08/11/2011 - 20:01
That the US postal service is on the verge of bankruptcy is well-known by now and was discussed by Zero Hedge long before it became mainstream news. Furthermore, as we previously noted, the key sticking point in cost reduction negotiations is the labor force compensation (80% of all costs), which is paid an average of $41.15 an hour, and which is over 60% unionized. As of today, we finally welcome the USPS to reality which has announced that, in an attempt to avoid bankruptcy, it is now seeking to reduce its total overhead by 20%, or a whopping 120,000 workers (a number which would amount to roughly an increase of 0.1% in the national unemployment rate). Ah yes, but this is prohibited by existing union contracts. Furthermore, WaPo writes that "SPS also wants to withdraw its employees from the health and retirement plans that cover federal staffers and create its own benefit programs for postal employees." Good luck trying to convince a labor union that cutting an ungodly amount of jobs is for the greater good. Alas, what happened in Greece (and what is about to happen in Italy) will be nothing compared to what will happen when the entire post office goes, well, postal.
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