Only in the world of postal discount fantasy can anyone justify the accompanying chart.
It shows that as USPS mail-processing work hours declined from 340 million in 2005 to 250 million in 2009, the postage discounts enjoyed by major mailers increased from 9.2 cents to 10.5 cents.
This is contrary to every economic principle that is rooted in reality. The reason is simple: As mail-processing costs decline because of improved efficiency, the costs the USPS avoids by having private companies pre-sort and pre-barcode the mail decline as well.
But in USPS Fantasy Land, as the Postal Service has become more efficient, postage discounts — which, under the law, cannot exceed the costs the USPS avoids when work is contracted out — have increased.
Despite the billions of dollars invested in automation, the elimination of 52 Remote Encoding Centers, computerized scheduling, and the dedication of highly efficient mail-processing employees, workshare discounts have developed a life of their own: They just keep growing.
Because workshare discounts are a joke, as president of the APWU, I can extend the following offer: APWU members will perform all mail sortation for .01 less than the discounted rate of 10.5 cents major mailers enjoy for performing a small portion of the process. The USPS will save money, and every APWU-represented mail processor can benefit from a modest raise.
see chart: http://apwu.org/news/burrus/2009/update21-2009-091202-chart.pdf