Should the Postal Service be exempt from Trump’s federal hiring freeze?

posted at 10:41 am on January 26, 2017 by Jazz Shaw

When Donald Trump signed his order to freeze federal hiring with exceptions only being made for the military and public safety officials he seemed to anger pretty much everyone except conservatives wishing to reduce the size of the federal behemoth. One organization is looking to push back on the order however, and that’s the United States Postal Service. As reported at Linns this week, USPS officials are hoping to make the case that not only does the Postal Service provide an essential public service, but their rather unique status as a quasi-government entity should leave them out of the order.

The United States Postal Service is questioning whether it should be covered by President Donald Trump’s federal hiring freeze.

One of the new president’s first actions, the Jan. 23 freeze could interrupt the Postal Service’s ongoing effort to hire tens of thousands of new carrier assistants.

Because labor costs represent around 70 percent of the Postal Service’s costs, getting cheaper labor has been a key goal of postal administrators.

I had to avoid an immediate gut reaction of saying hell no when this was brought up because I was so gratified to finally see the White House actually doing something in terms of reducing costs and shrinking the executive branch. Given time to consider the argument being made, I have to admit that there might be some merit to this idea.

First of all, unlike the rest of the executive branch departments which are affected, the USPS doesn’t operate on taxpayer dollars anymore. They are responsible for paying for themselves through the revenue they generate. (And it’s been that way for quite a while.) They’ve arguably done a poor job of that in the past, showing a lot of red ink, but in recent years they’ve actually crept back into the range of profitability. In the first quarter of last year, they recorded a profit of more than $300M, the first time they had done so in five years.

One other aspect of their argument also rings true. The post office has automated their business model about as much as can reasonably be managed in the past few years, but the service still relies on old fashioned shoe leather and manpower to do most of their work. (Their current estimate is that roughly 70% of their overhead comes from labor costs.) They do rely on cheap labor to stay in the black and they’ve been engaged in a long term hiring program to facilitate that goal. Stopping all hiring at this point will probably just drive up their labor costs and reduce their ability to stay competitive.

But in the end I keep coming back to the fact that it’s not being paid for by tax dollars. If that’s the case, why freeze their hiring? Much like a private business they’ll be left to sink or swim based on their performance. Perhaps the President should consider an exemption in this case.


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