Labor Reforms Must Be a Central Focus of USPS Oversight

An upcoming congressional hearing provides a timely opportunity for members of Congress to perform oversight on financial problems at the United States Postal Service (USPS). Addressing unsustainable labor costs at USPS should be a key part of the discussion.

The House Oversight Committee’s Subcommittee on Government Operations will hold a hearing on Thursday featuring the Commissioners of the Postal Regulatory Commission (PRC) as witnesses. The PRC is an independent agency which is responsible for overseeing key elements of USPS operations, including the Postal Service’s financial performance.

At the hearing, members of the House Oversight Committee will have the chance to ask the PRC commissioners about the continued poor financial state of USPS and options for the future.

USPS has faced net losses every year since 2007, and the financial problems at USPS have only intensified in recent years. Net losses for USPS in Fiscal Year 2025 totaled $9.0 billion, down slightly from the $9.5 billion loss in Fiscal Year 2024 but still far higher than the $6.5 billion loss in Fiscal Year 2023.

These massive losses stand in contrast to the promises of previous Postmaster General Louis DeJoy’s “Delivering for America” plan, which he claimed would allow the Postal Service break even in 2023 and post a $1.7 billion surplus in 2024. Instead, the problem has only gotten worse.

In large part, the worsening of USPS’s financial state is due to its massive labor costs. Employee wages and benefits now make up three-quarters of operating costs. Mail volume was 48 percent higher in 2012 than it is today, but USPS employs a larger workforce today to handle that much lower volume.

Former Postmaster DeJoy doubled down on the labor cost problem during his tenure, when he was caught on tape promising that USPS would pursue “the biggest insourcing ever in America.” To further his “insourcing” efforts, as explained by the Washington Times, DeJoy converted 125,000 part-time employees into full-time workers. He then went out and hired more part-timers, adding 30,000 careerists to the employment rolls over three years and increasing the size of the unionized workforce.

“I was actually with our supervisors union yesterday. I said, ‘Comrades, how come you’re not celebrating me?’” DeJoy reportedly quipped at a Mailers Technical Advisory Committee (MTAC) meeting in 2024.

As thousands more unionized, full-time career workers have been added to the payroll at USPS, the costs have only become more unsustainable. The conversion of flexible, part-time employees into permanent career positions raised short-run wage and benefit costs while also increasing long-run unfunded pension and retiree health liabilities.

In a letter to current Postmaster General David Steiner last year, Americans for Tax Reform President Grover Norquist recommended that USPS should “freeze full-time, career, non-carrier hiring and reduce the permanent workforce through attrition.”

“The Postal Service should restrict new full-time career hires to roles directly involved in its core mission of final-mile delivery. Given the continued decline in mail volume, USPS should also work to reduce its overall career workforce. Such labor cost reforms could save the agency billions of dollars,” he wrote.

The Postal Service is teetering on the brink of even greater failure. It’s time for USPS to stop serving the interests of the labor unions and instead make real reforms to right the financial ship.