Sunday, July 3, 2022
News for Independent BusinessCan the United States Postal Service be saved …...

Can the United States Postal Service be saved … and should it be?

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Back in the days when the United States Postal Service (USPS) was starting up, I am quite sure there were all kinds of pleas to save the Pony Express – claiming it to be an essential service.

Today, the question is what to do about the Postal Service. It is not the same as it was in my youth – speaking of the Postal Service, not the Pony Express.

In times past, the Post Office Department was a part of the federal government. The head of the Department was a member of the Cabinet appointed by the President. In 1971, that Department became the quasi-independent United States Postal Service – more or less a regulated private corporation.

At the time, it was argued by proponents that the new USPS would eventually be self-sufficient – running on its own income generated by customers. As is almost always the case with government promises, it did not happen – not even close. The USPS requires billions of dollars in taxpayer-funded subsidies to remain open.

What the subsidies do is enable the USPS to keep rates down. That gives them a competitive advantage over special delivery services, such as FedEx, UPS and Amazon. Despite the advantage, the USPS has lost a lot of package business to these other services, because they provide better services – faster delivery, better insurance coverage against loss or breakage. Larger shippers handle merchandise too heavy or bulky for the USPS.

Technology brought another blow to the old-fashion custom of letter writing. It is called email. Not too many years ago – when my business included managing NGOs – I sent out hundreds, and even thousands of letters, flyers, invitations and notices every month. Today, virtually all of that is done over the internet. Even birthday and Christmas “cards” are sent and received by email.

In the past year, I put postage stamps on less than half-dozen envelopes. On the other hand, I received hundreds of emails every day – and send out maybe 20 or 30. For some creditors, I use “paperless billing” – meaning it does not go through the Post Office – and autopay. That also means I use only about two or three checks from my checkbook each year.

The point is … times they are a-changing. For sure, we can continue to supply the USPS with enough money to survive. If we had applied that philosophy in the past, we could still have the Pony Express riding horses throughout the country.

We also have to keep in mind that you and I are paying to keep the USPS operating in the old method. What we avoid in rate increases, we pay for in subsidies.

The Progressives are all in on giving the USPS whatever it needs to cover the losses. That is because it makes postal employees essentially government workers – dependent on money from Uncle Sam a.k.a. you and me. The socialist brand calls for government control of the means of production and the workforce. Government’s role – according to the left – is to guarantee even unneeded jobs. It is how they operate.

MSNBC’s Ali Velshi recently offered up a full-throated plea to give the USPS whatever money it needs – whatever it wants. He claims it is an essential service upon which every American depends.

Velshi is correct when they say that mail and package delivery is an essential service. But even with all the favoritism and subsidies provided to the USPS, the innovations of private businesses have already taken a HUGE share of postal commerce – and if the postal service were to go out of business, the private sector would fill the void and essentially employ all those needed workers. The demand – albeit lessened – is still there for daily home delivery, so it would be met either by the USPS fundamentally re-inventing itself – just as Kresge’s Five and Ten became K-mart – or other new enterprises will fill the gap.

Oh yeah. It is true. Rates might have to go up to meet the market realities, but it would be more than offset by the billions of dollars currently being poured into the USPS as life support for a dying operation. Efficiencies might offset the inefficiencies of government-run and subsidized business enough to avoid any large increase in rates.

We do have an example of what happens if a government-run service is turned over to the private sector. The City of Chicago sold off its parking meters to a private company because the City was losing money. The private company did nothing that the City could not have done – increased the number of metered parking spots, introduced credit card payment and raised rates – and the company is making millions upon millions of dollars in profits. That money could have been flowing into the City coffers, but that is not how government works.

We Americans do have a romantic feeling about our traditional mail-delivery service. It is a cultural icon that we celebrate in song, theater and movies. We see our local delivery person as a bit of a friend – more so than that guy or gal from UPS or FedEx. Of course, we still express cultural romanticism about the Pony Express. But that is not a good basis to prevent a failing system from changing – or being replaced.

So, there ‘tis.

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