Saturday, September 24, 2011

That Terrible Inefficient Boondoggle Government Post Office


Growing up in California, my best friend in the whole world was 2000 miles away in Chicago.  The elementary and middle school years were lonely ones, without a single playmate from my school.  To survive the ages from 11 to 16, my friend in Chicago was my anchor.  Leslie and I wrote long silly letters to each other nearly every day.  That fat letter addressed to me in Leslie's handwriting was the first thing I looked for when I came home from school.  It was always there.  The cost of my daily lifeline ranged from 6¢ to 10¢.

Once a month or less, our parents let us call each other on the telephone.  Long distance was expensive and the egg timer was always set for three minutes.  We talked fast and there was no dead space.  In between, we wrote long letters about our lives, the top songs on the radio and whatever silliness girls that age tend to.  Usually the letters arrived with personal messages for the postman penned on the backs of envelopes.

Today a first class letter costs 44¢ and the Post Office is less used and much abused.  Competition for many services -- express mail, package shipping and postal boxes -- drains some of the most profitable services away.  The privatization forces are rallied again though.  They point to the success stories of UPS and FedEx.  The Postal Service's bloated employment and employee pay and benefits are blamed.  But mostly government itself is blamed.  We read that private industry will always do a better job than government at delivering services.

Unfortunately for the Post Office's critics, the federal government's postal responsibilities are encoded in the US Constitution.  Article I enumerates the powers of Congress and included is authority to establish post offices and postal roads.  Our first Postmaster General was none other than Benjamin Franklin himself.  Historically, the Pony Express and mail delivery were crucial to our development as a nation.

The Post Office was subsidized as a vital government service until 1971 when it was required to generate its own revenue.  First class stamps cost 3¢ from 1885 until 1957.  Taxes contributed the rest.  The last government subsidized stamp price was 13¢ in 1971.  Since 1971, fuel for all those mail vehicles (the largest fleet in the country) has risen from 36¢ per gallon to $4.00Average wages in 1971 were $6500/year.  Today the average worker earns $40,000.  If stamp prices rose in line with inflation, first class stamps today would cost 74¢.  (See the Inflation Calculator)  It's remarkable to me that our Postal Service has managed to keep prices so low, roughly half of inflation.

Daily mail delivery to 140 million homes and businesses is a big deal.  Those of you living in cities and suburbs where the task of bringing your personal mail to you doesn't seem so daunting might imagine what my local Post Office does.  Driving all the way to my mailbox (8 miles each way) every day to deliver my mail is an expensive proposition.  These days, I receive about three pieces of mail (mostly at bulk prices around 25¢ each) per day.  A few years ago, the mail averaged six or eight pieces including a few personal first class items.  The potential revenue supporting just my little mailbox has dropped from about $2.00/day to less than $1.00/day.  Of course the Postal Service is losing money.  Higher costs and lower revenues can be expected when fewer pieces are delivered and stamp prices aren't beginning to keep up with inflation.  Neither of those factors has anything to do with inefficiency,  inflated labor costs or any of the other accusations leveled at the Postal Service.


Neither FedEx nor UPS undertakes the costly basic mail service.  They do ship packages and overnight letter delivery at prices comparable to the Post Office, but not necessarily cheaper.   My husband ships flutes all over the world and in most cases, gets a lower price shipping through the Post Office than with UPS.  I have shipped many "care packages" to my daughter's family in Tajikistan and only the Post Office was affordable (though nothing is cheap to Tajikistan).  Curiously, only the Postal Service publishes its prices on its website; both UPS and FedEx keep their rates under wraps, only revealing your costs once you input all of your shipping info.

Often criticism of the Post Office centers on its worker pay and benefits.  UPS handlers start at $8.50/hour; US Postal Service handlers start at $14.18/hour.  Kudos for the Postal Service.  Their full-time workers start at $29,000 in a year, above the poverty line of $22,000 for a family of 4.  An entry level full-time UPS worker grosses $17,000 per year and would qualify for Food Stamps.  If we let UPS take over the Postal Service, we'll all be subsidizing again through our taxes, but this time via food stamps, Medicaid and housing assistance.  But full-time pay isn't really the right comparison.  More than half (53%) of UPS' workforce are part-time workers.  FedEx also has 40% part-time employees. The Postal Service is 13% part-timers. (CitationConverting the second largest civilian employer in the US to starvation wages is not in our national interest.

I don't want more underpaid workers I have to subsidize with safety net charity programs.  Plunging the Postal Service's sizable workforce into poverty is not the answer to shrinking revenues.  Eliminating Saturdays sounds fair to me.  Five days is all Canada and many other countries provide.  Raising stamp prices to 1971 levels (74¢ with inflation factored) also seems reasonable.  Continuing to discount bulk mail, necessary to help the Postal Service pay its bills, makes sense too.

I know my grandchildren will not experience the joy of settling into one of Leslie's letters immediately after school.  They will text and email and may not be able to even read our old handwriting.  But we are not at a time where email has fully replaced snail mail.  That thank you card, the catalog from your favorite merchant, a handwritten appeal for a favorite non-profit, actual Christmas cards with family photos, a real magazine arriving in the mail -- these are still very much a treasured part of my world.

Besides, if we didn't walk the half mile each way to the mailbox every day, what would replace the highlight of my dogs' day?