Monday, November 10, 2008

What are these 40,000 workers doing?

The US Post Office lost $2B last year and is thinking about laying off 40,000 of their 685,000 employees. But they say that their customers wont notice a thing
"The general public ... won't se any decrease in service.. They largely won't know about it."


  1. Nice attention to detail--and good point! It's hard to imagine that so many people have become obsolete overnight. Let's give government benefit of the doubt and assume that the 40,000 once offered real value but over time their value has decreased. Rather than hire and fire like a free market, the USPS kept them on board and prices rose while competition rose. Now, they see the light and will dump the whole lot at once. Why make a ripple when you can make a splash?

  2. One of my favorite non-Froeb textbooks is "Fiscal Administration" by John Mikesell. The first chapter is devoted to dissecting all the budgeting games public administrators like to play.

    The managers are acting quite rationally from their point of view. If you use up all your budget, you're likely to get a bigger one next year, whereas if you don't spend all your money this year, your appropriation will probably shrink.

    Power, prestige, promotions, etc, are often based on the size of your budget or your headcount, instead of your results. So what's a hard-working public servant to do?

  3. if they aren't useless, those people represent excess capacity as demand shrinks. usps is slow to respond

  4. How many employees do USPS have totally?