Ok, so we all know what the Postal Service is, but do we really have a grasp on this governmental juggernaut. We have come to know and love our local post office down the road but if the USPS were on the Fortune 500 it would rank 20th, right above Meryl Lynch. It”s revenues are slightly higher that UPS and FEDEX combined at $78 billion. With 700,000 employees, if you work for the federal government there is a 30% chance you work for the Postal Service.
Here is a rundown of their budget.
As you can see with a budget authority of $81.701 billion and collections (revenues) of $77.979 billion, the USPS runs a slight deficit, $3.722 billion of which it borrows from the federal government, i.e tax payers. The price of stamps and postage is tied to the consumer price index however expenses can vary from the price of gas, rising wages over inflation, lag in the economy, and competition from email and other forms of e-communication. So Postal Service occasional brings in surpluses and has come along way since its record debt levels around $11 billion in the 70’s.
Here are there expenses in detail. Profitability (and tax payer expense) varies from year to year.
Worker compensation and benefits is by far the greatest expense, as it usually is for any employee intensive company. So while the “Transportation of things” only cost $7 billion, it cost eight times as much to pay people for said transport.
And finally, the last from-the-source graphic lists their gargantuan full time employment.
You will note the signifigant workforce cutting in the 3 years depicted as revenues have grown at 3% a year.
But enough budget data, lets take a more comparative look at the nations largest employer outside the military. Here we have a series of graphs that compares the Postal Service to its largest private rival, the United Parcel Service (UPS) to the largest US company, Walmart.
No surprises here.
Here, Walmart generates about $188,000 in revenue per employee, compared $110,000 for USPS and $97,000, making UPS a bit more labor intensive than USPS despite its smaller size.
USPS does not run on a corporate ethos so its stated goal is not to generate returns for it’s investors. So while it’s a bad investment for your trust fund, a 39 cent stamp will go along way. Also while Walmart’s revenues are 7.5 times greater that UPS, its net income is only 2.5 as great, making it a better value.
Government jobs pay well. Jobs competing with government jobs pay slightly less.
The postmaster general of the United States makes 17 times less that the CEO of a similar company half its size. There have been concerns that the mere $173,000 is not enough to attract highly qualified individuals to the position. Fortunately the U.S. government is not in the business of minting millionaires with tax payers money (private contractors excluded). While the USPS may be a bad investment from an individual standpoint, the dividends are paid in the form of a higher standard of living for nearly three quarters of a million people, and the subsequent money they put back into the economy.
So there it is, the Postal Service, of which you knew existed but perhaps now, have a been understanding.