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Moving Mail Processing Could Cost Business $2.3M
YOUNGSTOWN, Ohio – Businesses in Mahoning and Trumbull County could lose $2.3 million in annual income, 261 good-paying jobs will be lost in the Youngstown area, and mail delivery will be delayed and more costly should the U.S. Postal Service implement its plan to close the Youngstown Mail Processing and Distribution Center in July 2015.
That’s the conclusion of a report from the Fiscal Policy Institute of New York, commissioned by the American Postal Workers Union, which studied the economic impact of the planned consolidation of the Youngstown operations into the Cleveland processing and distribution facility.
The study, and others focusing on planning closings elsewhere, will be released Friday as part of the union’s “National Day of Action” to protest what it describes as “devastating cuts in service to the American people -- cuts so severe that they would forever damage the U.S. Postal Service.”
The Youngstown facility is one of 82 mail-processing and distribution centers scheduled to close in July, reducing the area’s total economic activity by $24 million, according to the Fiscal Policy Institute.
The postal service estimates it would save $7 million in net annual savings by closing the Youngstown processing center.
“However ‘savings’ for the Postal Service comes at a dear economic and individual cost for the metropolitan Youngtown region,” according to the Fiscal Policy Institute.
Its study estimates that eight industries in metro Youngstown would lose nearly $1.9 million in annual business income. Real estate would be hardest hit, according to the study, with a loss of nearly $1.16 million. Banking follows with a loss of $237,365; then restaurants ($102,609), utilities ($99,761), health care ($98,441), wholesale businesses ($74,371), trucking ($52,019) and legal services ($43,487).
Factoring in other industries, total annual business losses are estimated at $2.3 million.
“The travesty is that the cuts are absolutely unnecessary -- because postal operations are profitable,” the union contends, noting that the Postal Service has earned an operating profit so far this year of more than $1 billion. “For four years running, its finances have been improving.”
The postal service has already closed 141 processing facilities as part of the first phase of its consolidation plan. The second phase begins in 2015. Total annual savings from the consolidations is estimated at $2.1 billion.
Meantime, on Jan. 5, the USPS is slated to lower “service standards” to virtually eliminate overnight delivery -- including first-class mail from one address to another within the same city or town, the union points out. “All mail (medicine, online purchases, local newspapers, newsletters, bill payments, letters and invitations) throughout the country would be delayed.”
In 2006 Congress required the Postal Service pre-fund future retiree health benefits 75 years in advance – “something no other public agency or private firm is required to do. That costs the Postal Service 45.6 billion a year – and that’s the red ink,” the union says.
Tomorrow’s National Day of Action will include press events and protests at 149 cities across the country, calling on Congress to pass legislation that would “improve, not degrade, postal service.”
The press event here takes place at noon in the Covelli Centre Community Room.
Copyright 2014 The Business Journal, Youngstown, Ohio.
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