Saving the U.S. Postal Service is not as simple as some lawmakers think

The two weeks before Christmas are the United States Postal Service’s busiest days of the year. This year, an increase in e-sales, pandemic package deliveries, and staffing shortages will likely make the crunch even more noticeable for customers awaiting mail. At a time when more people are relying on the Postal Service’s survival and success, it makes sense to pay attention to its precarious position — and what can save it.

The fact is, the Postal Service is in financial trouble. With more than 600,000 employees, it posted a $9.2 billion loss in 2020, following 11 fiscal years of losses. Yet, Democrats and Republicans alike agree the Postal Service is incredibly valuable and worth protecting. Everyone sending and receiving holiday mail is invested in the value of the service, whether they think about it or not. There is, however, disagreement on the best way to protect it.

A popular “solution” to the financial problems is for the Postal Service to stop pre-funding health-care retirement benefits for current employees while continuing to fund retirees’ health benefits. As a finance professor who studies the Postal Service, I believe that’s a bad idea. Instead, the Postal Service needs to restructure its retirement plans to be more in line with what is most common in the private sector.


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