The United States Postal Service posted a $9.0 billion net loss in Fiscal Year 2025, with employee wages and benefits now consuming three-quarters of operating costs, according to a June 2, 2026 commentary by Americans for Tax Reform. The report highlights that these massive labor expenses are driving the agency's financial collapse, as Congress prepares to hold oversight hearings on USPS's continued decline. The Postal Service has faced net losses every year since 2007, and the problem has only intensified despite promises of reform.
USPS's $9.0 billion loss in FY 2025 represents a slight improvement from the $9.5 billion loss in FY 2024, but it's still far higher than the $6.5 billion loss recorded in FY 2023. Mail volume has dropped 48 percent since 2012, yet USPS employs a larger workforce today to handle that much lower volume. Former Postmaster General Louis DeJoy converted 125,000 part-time employees into full-time workers during his tenure, then hired 30,000 more career employees over three years, expanding the unionized workforce. These losses stand in stark contrast to DeJoy's "Delivering for America" plan, which promised the Postal Service would break even in 2023 and post a $1.7 billion surplus in 2024.
The report quotes DeJoy from a 2024 Mailers Technical Advisory Committee meeting, where he reportedly quipped to union leaders: "I was actually with our supervisors union yesterday. I said, 'Comrades, how come you're not celebrating me?'" According to Americans for Tax Reform President Grover Norquist, USPS should "freeze full-time, career, non-carrier hiring and reduce the permanent workforce through attrition." In a letter to current Postmaster General David Steiner, Norquist wrote that "the Postal Service should restrict new full-time career hires to roles directly involved in its core mission of final-mile delivery."
The conversion of flexible, part-time employees into permanent career positions has created a double financial hit for USPS. Short-run wage and benefit costs increased immediately, while long-run unfunded pension and retiree health liabilities ballooned for the future. DeJoy's self-described "biggest insourcing ever in America" added thousands of unionized, full-time career workers to the payroll precisely when mail volume was plummeting. As the Washington Times explained, this approach prioritized expanding union membership over financial sustainability. With mail volume down nearly half in just over a decade, the agency is paying more people to handle less work—a formula that can't last.
The House Oversight Committee's Subcommittee on Government Operations will hold a hearing Thursday featuring commissioners from the Postal Regulatory Commission, the independent agency responsible for overseeing USPS financial performance. The commentary argues that USPS is "teetering on the brink of even greater failure" and must stop "serving the interests of the labor unions" in favor of real reforms. Labor cost reforms could save the agency billions of dollars, but only if Congress forces USPS to align its workforce size with the reality of declining mail volume.