At issue | Aug. 9 commentary by Ellen Williams, "U.S. Postal Service undergoing financial overhaul"
At Landmark Community Newspapers, Inc., in Shelbyville, when we face tough economic times, we have to make tough decisions.
But ultimately, our goal is to grow our business by providing services that customers want and need at competitive prices.
Members of the National Newspaper Association, which publish about 2,000 community newspapers across America, do the same. I serve as its longtime Postal Committee chairman.
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That's why I want to respond on behalf of them and other mailing industries in Kentucky to the recent opinion piece by Ellen Williams of Kentucky, member of the United States Postal Service (USPS) Board of Governors.
USPS has decided to place an unnecessary burden on Kentucky's families, workers and businesses by proposing a major price increase that equals 10 times the rate of inflation.
We understand USPS is facing a decline in mail volume and revenue, but the Postal Service cannot plan its recovery on the backs of customers. We can't afford it, and it will only increase the downward spiral in postal revenue.
In 2006, Congress passed a law that prohibited the Postal Service from raising postage prices greater than the rate of inflation. The law has sound reasoning. The Postal Service is no longer allowed to raise rates to make up lost revenue or to cover its inability to manage costs.
The goal of the law was to force USPS to manage its workforce well, control costs and improve its business through innovation and new products.
Sen. Susan Collins, R.-Maine, a key author of the 2006 Postal Accountability and Enhancement Act, agreed that the proposed increase was unwarranted. In her official comments to the Postal Regulatory Commission, Collins said that the law's 'extraordinary or exceptional circumstances' test has not been met by the USPS.
During Postal Regulatory Commission hearings recently the Postal Service admitted it is not facing an immediate cash crisis, as previously claimed.
While USPS has done a fair job of taking costs out of the system by not filling jobs and by consolidating some plants, it will claim to have greatly reduced costs that way.
But the price of labor continued to increase when other failing industries have frozen or decreased wages, and so USPS losses continue to soar.
Rather than tackle the hard issues, USPS took the easier route and let existing contracts push up costs. Rather than renegotiating with its workers, it is looking for a quick fix. Other industries have addressed their problems jointly as management and labor, knowing sustainable jobs are possible only when the business is sound.
During 2009, the Postal Service costs per unit increased because it did not make the necessary adjustments. As any businessperson knows, if your revenue is down, you should make sure your expenses are down. Americans are making these choices at their kitchen tables and businesses all the time. But the Postal Service apparently is not.
For community newspapers that mail, our costs would increase 8 to 10 percent, which would be hard to recover from already hard-hit subscribers. Within Kentucky, there are literally thousands of jobs in the mailing industry, such as United Mail of Louisville and Bluegrass Mailing of Lexington, that are at risk if commercial mailers move to other channels, like the Internet, because USPS forces them out of the mail with high prices.
Once USPS busts the legislated rate cap, it can return to business as usual with price increases that further lower mail volume. Then USPS jobs will be even more at risk than they are now.
When sales are low, the last action one should take is to raise the price or diminish service. USPS is asking us to pay more, but we get the same delivery times, or worse.
The economic effects of this rate increase are widespread. As companies are forced to pay more, we will have to do what the Postal Service refuses to do, and that is cut costs and valuable jobs. Companies in Kentucky that rely on USPS will be forced to cut their staff's pay, hours and jobs.
It's companies, large and small, and Kentucky citizens that will help drive America out of this recession. We can't afford to have Postal Service bureaucrats in Washington jeopardize that.
And that's why we're asking citizens to take action by visiting the Affordable Mail Alliance Web site, www.affordablemailalliance.org.