“Seasonal” Postal Hires Weighing Down Santa’s Sleigh

The holidays are once again approaching, which can only mean a surge of packages and heartfelt letters from family and friends. The U.S. Postal Service (USPS) is in preparation mode for the onslaught of mail, but not in the way consumers might expect.

According to a report by Government Executive senior correspondent Eric Katz, the USPS, “is planning to hire just 10,000 temporary employees during the current holiday season as part of a new approach that management has acknowledged comes with some risks…[t]he seasonal hiring marks a 64% reduction from the employees brought on in 2022…’peak season’…” Instead of making temporary, targeted hires, the USPS insists on over-hiring full-time staff and agreeing to unreasonable union demands. It’s time for the agency to ramp up the right way for the holidays and stop rubber-stamping hires.

It’s usually a no-brainer for delivery services to increase headcount for the holidays. Temporary help is usually fairly cheap, and having more boots on the ground means more satisfied consumers. That’s why the United Parcel Service (UPS) is hiring 100,000 workers this season, and based on local figures, FedEx is not far behind. But, according to Postmaster General Louis DeJoy, the USPS doesn’t need much holiday help because of its large full-time staff. Since 2021, the agency has converted 150,000 part-time employees to full-time. Supposedly, this additional manpower will keep consumers satisfied through the holiday. Even though UPS and Fed Ex are hiring more seasonal workers, their future financial burden will be considerably less than the USPS.

The approach by the USPS is incredibly expensive. Full-time conversions put plenty of pressure on postal finances because career employees earn roughly double what corresponding non-career employees make. This compensation gap is no small issue, given that labor costs are about three-quarters of USPS’ expenses. Recent “reform” legislation may have shifted retiree health costs to other (struggling) federal agencies, but this fiscal hot potato is unlikely to make much of a difference. About 90 percent of postal labor costs lie in the (non-retiree) “compensation and benefits” bucket, and employees’ unions know how to keep the funds flowing. Unions such as the National Postal Mail Handlers Union and the American Postal Workers Union confidently enter into negotiations with the Postal Service with the knowledge that, according to federal law, intractable impasses between unions and the service will automatically force the agency into a binding arbitration process.

That means a mediator is certain to grant at least some concessions to the union, a process the American Postal Workers Union admits is friendlier to them than private-sector union-management standoffs. In short, the Postal Service is creating a pipeline where “seasonal” employees are placed in permanent, higher-compensated positions costing the agency a pretty penny. This conversion-to-concession pipeline makes it far more difficult for the agency to shrink its network when demand falls, putting the service at a distinct disadvantage to private-sector competitors.

The Postal Service can solve its holiday delivery quandary by hiring truly temporary help as needed. Even if the agency over or under-hires for a holiday season, this imbalance won’t hurt the agency fiscally for years. In contrast, a bloated full-time payroll amounts to a permanent lump of coal for taxpayers. 

There are also other ways the service can maintain a lighter footprint. A 2021 report by the postal inspector general notes that “among nearly 13,000 underwater (financially weak) post offices, one-quarter are within three miles of another post office and more than half are within five miles.” The service could close these post offices without sacrificing access for nearby consumers.

It’s time for a smarter approach to holiday hiring, seasonal spending, and office consolidation. Consumers are pining for the agency to rein in full-time spending and sleigh revenue expectations.

David Williams is the president of the Taxpayers Protection Alliance.