![]() Although the Postal Service is required by law to break even, and usually does for about three years after each rate increase, rising costs-particularly work-force costs–eventually drag it back into the red. In the Post Office, the problem symptom is a recurring budget deficit. Over a period of time, the problem symptom returns, often more dramatically than before. A quick solution is implemented, which alleviates the symptom in the short term, but the unintended consequences of the “fix” only magnify the problem’s severity in the long term. The Post Office’s ongoing woes can be characterized as a “Fixes that Fail” situation, in which a problem symptom demands immediate resolution. citizens will again ante up for a first-class rate increase. His plan: introduce an early retirement package to trim the staff and allow the Post Office to benefit from the previous investments in computerization and automation. ![]() Runyon is once again faced with a growing deficit, due largely to a payroll that consumes 80% of the budget. In 1994, current Postmaster General Marvin T. When that failed to case the deficit, he pushed through the 29-cent postage stamp. In 1990, the year of the last postage increase, Postmaster General Anthony Frank faced soaring labor costs that fueled a growing budget deficit. The Postal Service has long been plagued by budget deficits and rate increases. And the service’s deficit… could top $2 billion.” (“The Check’s Still Not in the Mail,” Business Week, March 28, 1994). Now, to help pay the bills, Runyon proposes raising the price of a first-class stamp from $.29 to $.32-and overall postage rates by 10.3%… When Runyon gives his annual report to Congress in late March, he will have to face an embarrassing fact: Postal Service employment has actually grown. The ambitious goals: Improve customer service, wipe out the Post Office’s deficit, and keep rate hikes below the inflation rate. Runyon took over the US Postal Service in 1992… He announced plans to slash layers of management and an early retirement program designed to trim the 700,000-strong workforce.
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