Forever Stamps Partly to Blame for USPS Fiscal Woes
The USPS says mail volume will be down some 9 billion pieces in the current fiscal year from last year, partly because of the downturn in the American economy.
Potter told this week's meeting of the agency's governing board - The Postal Board of Governors - that the Post Office is cutting costs by reducing work hours for its employees because it must "take steps now to shore up its business."
He went on to say the agency has decided to offer early retirement — without incentives or bonuses — to thousands of clerks, mail handlers and supervisors.
The cost cutting affects workers 50 and older who have 20 years of service and employees of any age who have 25 years of service.
Potter also pointed out that the Postal Service will need more significantly more funding from the federal government to keep its operations on track. The Postal Board of Governors approved on Wednesday a $144.6 billion appropriation request for the 2010 fiscal year, up from $117.7 million the USPS requested for the 2009 fiscal year.
In a related story the Los Angeles Times says a share of the expected loss this year stems from the popular forever stamps that remain valid for first-class postage regardless of price increases. The stamps were introduced at 41 cents and sold well before last spring's rate increase. They now sell for 42 cents.
The forever stamp forced the agency to change how it accounts for stamps that are purchased but not used. Formerly that was a category dominated by collectors who save the stamps, but people buying the forever stamp tend to save it until the price goes up and then use it. Early figures indicate that the stamp may be responsible for as much as $230 million in revenue loss.
Shown above Postmaster General John E. Potter at the March 26, 2007 introduction of the Forever Stamp in Washington, DC.
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