Is the Postal Service a Dead Letter?

It's time for competition in mail delivery

By P.J. Orvetti
|  Wednesday, Jun 23, 2010  |  Updated 12:31 PM EDT
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Is the Postal Service a Dead Letter?

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My sons love to get the mail. It’s like a little Christmas gift each day -- even though there’s rarely anything for them, and what does come is usually a stack of bills they are too young to comprehend. Lucky them.

Our letter carrier refuses to hand them the mail. He’ll give it to me, or my wife, but my sons are not to be trusted. If they are in our front yard when he comes up the steps, they run in the house and crouch behind the mail slot, so they can catch the rain of envelopes.

They could soon lose this pleasure one more day each week, as the U.S. Postal Service is considering ending Saturday delivery. It is an unfortunate, but sensible, idea. With the rise of the Internet and mobile technology, very little personal communication is done by letter anymore. Even those ubiquitous bills are moving online.

Today, two of the Postal Service’s biggest clients, Amazon and Netflix -- ironically, both Internet-based powerhouses -- are telling legislators what they think of the proposed cuts. Amazon calls Saturday cuts a “bad idea,” and threatens to move more of its delivery business away from the USPS. Netflix, which does business by envelope rather than bulky package, does not necessarily support service cuts, but understands why they might be required.

It is pretty impressive that I can stick a letter in my mail slot, and, for 44 cents, someone will pick it up and deliver it to any other mail slot in the United States. But it costs more than 44 cents to actually move that letter, and USPS will finish this fiscal year $7 billion in the red. Even with job cuts equivalent to 120,000 full-time positions over the past few years, the post office is running a deep deficit.

Part of the problem, Joe Davidson writes in the Washington Post, is that USPS “overpaid $75 billion into the Civil Service Retirement System from 1972 to 2009.” In addition, average compensation for a postal worker is $83,000 per year.

And when the Postal Service does try to cope with its problems, politicians get in the way. In 2009, USPS proposed consolidating 3,000 locations. But after individual members of Congress pared the list of all the district outlets they wanted to save, the list was left at just 157.

One option that’s not on the table, but that should be, is the privatization of what’s left of the Postal Service. Germany has privatized its post office, and even a social democracy like Sweden -- one of those “welfare states” conservatives love to criticize -- has ended the government mail monopoly.

The alternative: higher prices, more job cuts, lower-quality service, and more taxpayer subsidies for the floundering government mail company.

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