One measure of the declining value of the U.S. Postal Service is the diminished outrage that greets each price increase for stamps and other services. It just isn’t that big a deal to those who have turned to alternatives.
The Postal Service on Tuesday proposed to raise the price of first-class stamps by 2 cents, beginning in January. Will the 46-cent stamp lick the problem? Nope. This price-hike strategy has been tried seven times this decade and it has failed to stop the budgetary bleeding.
The problem goes beyond a slack economy. Mail volume from 2008 to 2009 dropped by 12.7 percent. In the aftermath of the 9/11 terrorist attacks, it only dropped 2.2 percent. Demand for traditional mail service has waned as more people turn to texting, e-mail and online networking for personal correspondence, websites for bill paying and competitors for sending parcels.
A trip to the mailbox has become anticlimactic for many Americans. If they don’t pick up the mail each day, they’re not missing much that is truly important.
The Postal Service says the price increase for stamps and other services would raise $2.5 billion by the end of next year, but it faces a $7 billion shortfall. Last year, the service lost $3.8 billion even after laying off 40,000 workers. It has cut expenses by an average of $1 billion every year since 2001.
Clearly, this isn’t a sustainable business model. Demand is not going to increase, especially with price hikes. The only plausible solution is to dramatically curtail the amount of service and to continue cutting labor costs.
The first step would be to cut Saturday service, but Congress needs to approve this move. It should. Perhaps some members of Congress are holding out hope for a government bailout, but that wouldn’t be justified when there are so many alternative delivery options and the federal budget deficit is sky high.
The Postal Service has been set up to survive on its own. If it can’t, then it needs to alter the mission. A price hike could actually hasten the day of reckoning.
Postal Service polling shows that most people would prefer five-day service over price increases. The reality is that there probably isn’t enough demand for five-day service to cover the projected $238 billion deficit over the next 10 years.
That’s not to say that mail delivery has gone the way of the Pony Express. To the elderly and those in rural areas with poor Internet connections, it is still vital. But the current frequency of service cannot be sustained without a direct subsidy, which isn’t justified.
It ought to be obvious by now that the Postal Service needs to tailor delivery to those who truly value it. Chasing the disinterested is a waste of time and money.