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U.S. Postal Service Has Never Been More Important, or Endangered

April 13, 2020, 8:00 AM

Jonathan Smith, president of the American Postal Workers Union’s New York Metro chapter, favors social media for communicating with his 5,000 members, who toil in post offices and sorting centers in the Bronx, Manhattan, and New Jersey. If you’d gone to the chapter’s Facebook page a year ago, you’d have found Smith in videos prodding them, often with gruff geniality, to attend the union’s rallies, sign up for its annual summer shindig, or be more appreciative of his efforts as their leader.

Early in the coronavirus crisis, the videos focused on reminding everyone to practice social distancing and wash their hands. By mid-March, Smith, who’s 51 and heavyset, with long dreadlocks, had become more impassioned, sometimes banging the table with both hands to underscore the urgency of his points. Some postal workers had tested positive. Several had died. Those still on the job were clamoring for protective gear, Smith railed, and the U.S. Postal Service wasn’t providing it.

He said his members weren’t afraid of hazardous conditions—they’d been through the post-Sept. 11 anthrax scare, and they live with the possibility of mail bombs. “We are proud to do what we do,” the union leader said in a video on March 29. “But when you don’t have gloves, when you don’t have sanitizer, when you don’t have masks, when you don’t have wipes, you’re not asking us to work in a hazardous situation, you’re asking us to commit suicide!”

As if things weren’t bad enough at the USPS already. The woes of the 245-year-old service are familiar. Mail volume has collapsed. Financial trouble is relentless. The U.S. president takes potshots. In October, Megan Brennan, the 74th postmaster general and the first woman to hold the title, announced her retirement, having failed to halt the slide into insolvency. She’s still in the job, though, because the service can’t seem to find anyone else with her qualifications to do it.

At the same time, the crisis has brought moments of pride and hope. Throughout the country, as governments have asked or ordered their citizens to stay home, Americans have been reminded of the role the USPS plays in their life: It’s perhaps the nation’s oldest essential service. “Letter carriers are getting thank-you notes in their mailboxes,” says Mike Hayden, president of Branch 100 of the National Association of Letter Carriers in northwestern Ohio. “Kids are writing thank-yous in chalk on the sidewalk.”

Jonathan Smith, president of the New York Metro local of the American Postal Workers Union.
Photographer: Christopher Gregory-Rivera for Businessweek

The bitter irony is that just when the Postal Service is again proving crucial, its future has never seemed more tenuous. Even with a rise in package deliveries, the economic downturn is devastating the USPS. In a letter on March 24 to Senate Majority Leader Mitch McConnell, House members Carolyn Maloney (D-N.Y.) and Gerry Connolly (D-Va.) said the USPS might run out of cash by June and urged him to include $25 billion in aid in the congressional stimulus bill that ultimately provided $2.2 trillion in relief. “We are barreling toward a catastrophic collapse if we don’t take action,” Connolly says.

The White House would agree only to permit the USPS to borrow an additional $10 billion from the U.S. Department of the Treasury to cover its Covid-19-related shortfall. That was at the direct order of President Trump, according to a senior administration official. Trump and the USPS have had a fraught relationship. In 2017, and again on April 7, he questioned the intelligence of its senior officials, saying it loses money on its contract to deliver packages for Amazon.com Inc., whose chief executive officer, Jeff Bezos, is not coincidently owner of the Washington Post, which has frequently broken stories that are unflattering to the administration. The USPS says it makes money from the Amazon deal.

Robert Duncan, chairman of the Postal Service Board of Governors and a Trump appointee, called the $10 billion loan “a nice start” but cautioned that it wouldn’t be enough to stave off “a liquidity crisis” at the agency. The Postal Service recently told Congress that because of the virus, it sees mail volume falling by 50% in the third quarter of the fiscal year that ends in September and 57% in the fourth.

Meanwhile the USPS workforce grows more jittery. According to the World Health Organization, the virus is unlikely to be transmitted via letters and packages, but that still leaves a huge challenge keeping 630,000 employees from being infected by co-workers or customers.

“This thing has progressed to the point where we’ve had four or five deaths now,” Smith said on April 1, referring to his part of the country. “I got another report today that somebody else has died from contracting this virus. So this is not a matter of right and wrong. This is not a matter of the union vs. the Postal Service. This is a matter of life and death.” As of April 9, 483 had tested positive for Covid-19, and some had died; the USPS declined to give a number.

The post office branch on John St. in Lower Manhattan on April 7.
Photographer: Christopher Gregory-Rivera for Businessweek

The USPS delivered 143 billion items last year, almost half the world’s mail. It maintains 31,000 post offices, 276 processing and distribution plants, and 228,000 trucks and vans. Revenue in 2019 was $71 billion, which the Postal Service boasts would have made it No. 44 on the Fortune 500 if it were a private-sector company.

Even so, the USPS was whipsawed by the last financial crisis, which hastened the decline of hard-copy communications in the U.S., and the agency has never recovered. In a congressional hearing last year, Brennan, a plain-spoken former letter carrier from Pottsville, Pa., lamented that mail volume had fallen by 31% since 2007, forcing the USPS to default on $48 billion in mandated prepayments for future retirees. “Our business model … is unsustainable,” she said. The USPS is severely constrained in its ability both to raise prices and to cut costs. When it proposed in 2013 to end Saturday delivery, which it said would save $2 billion annually, Congress quashed the idea.

Brennan has been pleading fruitlessly for congressional action since she became postmaster general in 2015. It hasn’t helped that unlike the Obama administration, which treated the USPS with indifference, the Trump White House has been openly hostile. In addition to his criticism of management, Trump has pushed for privatization. Germany, Britain, and Sweden have all made this move with their services, but it has little chance of receiving congressional approval in the U.S. It’s unacceptable to the agency’s politically active unions and their allies on Capitol Hill.

Brennan announced her resignation in the fall. In the past the USPS has had a successor ready at transitional moments. That it didn’t this time speaks to how unenviable the position has become. In January, Brennan agreed to postpone her retirement and continue on until the board could find her replacement.

She soon found herself facing one of the greatest crises in the agency’s history. The first order of business was employee safety. In early March the USPS formally advised workers to follow the Centers for Disease Control and Prevention’s guidance on hand-washing and social distancing. The agency issued directives to increase the number of daily cleanings for facilities and delivery trucks. It also reached a deal with its unions to make it easier for employees to use sick time and another allowing it to hire employees who wouldn’t be eligible for full benefits as absenteeism rose. (In addition to the workers who are sick or fearful, some are staying home to be with their children, whose schools have closed.) “Not a lot of people are coming to work, either because they are sick or they are scared,” a letter carrier in Upper Manhattan said as he made his rounds in late March. He asked not to be identified for fear of alienating his superiors.

Soon the USPS was taking more radical measures. W.W. Grainger Inc., the service’s chief supplier of masks and gloves, was struggling to fill orders for its many clients, which also include hospitals. So mail carriers were told they could use their USPS-issued credit cards, which are usually reserved for fuel purchases, to buy any protective equipment they could find at gas stations and auto repair shops. Employees at post offices were instructed to put tape on the floor to keep customers 6 feet apart and to place shower curtains or plastic sneeze guards at retail counters.

Andrew Henry, steward of the Postal Service’s Manhattan motor vehicle service department, on April 7.
Photographer: Christopher Gregory-Rivera for Businessweek

It was one thing for Brennan to issue edicts from headquarters and another to get managers to carry them out, though. “There are certainly places where the word doesn’t get down,” says Paul Hogrogian, national president of the 44,000-member National Postal Mail Handlers Union. By mid-March, the APWU’s Smith was pounding the table. He says now that when he asked for gloves and masks, supervisors told him CDC guidance didn’t call for them. “What I kept getting was, ‘Well, CDC requires this, CDC requires that,’ ” Smith says. “I got so tired of hearing about CDC requirements. I wanted to hear more about common sense.”

In his videos, Smith argued that if the USPS couldn’t ensure worker safety, it should shut down for several weeks until it could figure out which employees were sick to prevent the further spread of the disease. Postal workers across the country responded by posting messages on his chapter’s Facebook page, saying they wished the pugnacious Smith was their leader.

Smith acknowledges that his ultimatum put him at odds with APWU’s national leaders, who haven’t been as critical of the Postal Service’s handling of the pandemic. Smith says he’s told leadership—people who, in his view, haven’t worked shoulder to shoulder with their members in years and don’t really know what’s going on—that he wasn’t going to be “politically correct” in his videos. He says he got a call from a USPS official who told him he could lose his job for disparaging the agency. “I said, ‘If you want me to shut up, then protect my employees,’ ” Smith recounts. “I’m not going to be intimidated by their threats.” Mark Dimondstein, president of the APWU, says that the USPS has been doing the best it can and that he doesn’t want to debate the head of his union’s largest chapter. A USPS spokesman declined discuss whether anybody at the agency tried to silence Smith.

The desire of postal officials and most union leaders to present the agency in the best possible light is understandable considering what’s been happening in Washington. As the stimulus bill was being crafted in March, both factions were appealing to Congress for help. The Democratic-controlled House proposed, in addition to the $25 billion emergency appropriation, the forgiveness of an $11 billion debt held by the Treasury Department. Postal union officials and lobbyists for companies and nonprofits that use the mail say there was some Republican support in both chambers for direct financial aid.

Trump steadfastly opposed any cash infusion. The senior official who confirmed this says the administration was loath to use the stimulus to rescue an agency it considered on the verge of failure before the crisis began. Why throw money at the USPS, the official asks, when the administration had already proposed measures that would restore its financial health, such as eliminating the rights of the postal unions to collectively bargain for wages?

The USPS responded with muted disappointment to the $10 billion loan Trump ultimately agreed to, issuing a statement saying that although it appreciated having the option, borrowing more money wouldn’t forestall disaster. The service’s supporters say the loan will only worsen the agency’s financial woes, and the APWU has offered an even stronger critique. “Rather than enhance and uphold and strengthen the Postal Service, it seems this administration is using the crisis to move in with their privatization agenda,” Dimondstein says.

Midtown Manhattan, April 4.
Photographer: Christopher Gregory-Rivera for Businessweek

Now attention turns to the next stimulus bill. House Speaker Nancy Pelosi is talking about including as much as $4 billion to increase voting by mail in the November presidential election. Supporters like the implications: The USPS, beleaguered though it is, stands ready to rescue American democracy, which like so much else has been imperiled by the virus. Trump says he’s opposed. “I think mail-in voting is horrible. It’s corrupt,” he told reporters on April 7, though there’s little evidence of this. He then acknowledged that he’d voted by mail himself in the last Florida election.

If there’s good news for the USPS, as the virus spreads and mail volume declines, it’s that Grainger is now providing workers with sufficient protective gear. “At this point in time, there’s absolutely no reason that any employee in the Postal Service should not have the personal protective equipment that they need out in the field,” says Ronnie Stutts, president of the 115,000-member National Rural Letter Carriers Association. “Masks and gloves have been made available to everyone. We’re now hearing that we have literally hundreds of thousands of bottles of hand sanitizer.”

In New York, Smith sees improvement, too. “I will admit they’re starting to get the supplies up to speed,” he says. “I’m not getting as many calls about the lack of gloves, the lack of masks.” Still, Smith says, sanitizer and wipes are scarce.

So, it would seem, is time. But the USPS will again remind everyone of its essentialness to American life soon enough. Stimulus checks should start appearing in mailboxes around the end of this month.

Read more: When Working Means Deadly Risk, Backlash Brews

To contact the author of this story:
Devin Leonard in New York at dleonard12@bloomberg.net

To contact the editor responsible for this story:
Daniel Ferrara at dferrara5@bloomberg.net

Jeremy Keehn

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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