Could cuts actually cost the United States Postal Service more than they save it?
If a survey commissioned by the Postal Service and cited by CNNMoney is to be believed, the Postal Service’s planned closures will result in more than a $5 billion loss in business. If that's true, it would be a blow to a business that hopes to save only $3 billion via mass layoffs and closures.
(By the way, you should read the rest of the CNNMoney report here.)
That's likely why the Postal Service tried to keep the survey's findings under wraps, commissioning and releasing a new survey with more conservative estimates for lost business. The Postal Service's complaint was that the report assumed that changes in services would all happen at the same time.
The irony, of course, is that the closures are aimed at saving money, and it having the opposite effect would be entirely counterproductive. The Postal Service said in February that the cash-strapped agency is moving forward with a plan to close or consolidate more than 260 mail-processing centers starting in May. The plan, which as previously states aims to cut costs by about $3 billion, will result in up to 35,000 lost jobs. In addition, the proposal will likely mean slower service, including an end to next-day delivery.
Cutting jobs without much payoff would be especially painful in certain areas that have already suffered from the recession. In Michigan, where 475 jobs are likely to be affected by the cuts, medium-sized cities will likely feel the ripple effects of the 50 or 60 lost jobs at the processing centers themselves and associated jobs like driving trucks between processing centers.
It's not just ordinary Americans that are concerned with dramatic changes. Companies and unions with a stake in the Postal Service's overhaul have spent nearly $300 million to lobby lawmakers, as the agency has struggled to deal with its finances, The New York Times reports.
And some lawmakers are concerned that the cuts will affect voters' ability to cast their ballot by mail, according to The Hill. California's Secretary of State has even gone as far as to suggest that the Postal Service delay the cuts until after the November election.
But some may actually be benefitting from the Postal Service cuts. U.S. banks are using the looming closures to sell services like electronic payments that may be more useful if mail delivery service gets slower.