September 10, 2015
business, but not really. It’s a government program, except that it’s not.
U.S. Postal Service, and whatever it is, its era has passed.
2000 and 2013, the volume of first-class mail, a “profit” center, declined by
36.4 percent. As a result, net income has been in the red for each of the last
eight years. In March, consultant
Robert J. Shapiro documented that in the quarter-century from 1987 to 2012,
USPS employee productivity grew by 0.7 percent, in stunning contrast to the
transportation-warehousing industry, whose workers improved efficiency by 2.5
percent. It slammed into its debt limit nearly three years ago. Last month, the
service’s inspector general highlighted “a substantial increase in delayed mail
over the last several months.”
defenders claim that the USPS must comply with a number of burdensome
congressional mandates. That’s true. Every address, no matter how remote, is to
be served. Pricing must be uniform, no matter the distance. Nonprofits get a
discounted rate, as do periodicals. Employees have “rights
to bargain collectively over their wages, hours, and conditions of employment
through their exclusive bargaining representatives.”
service’s taxpayer-provided goodies, direct and hidden, more than compensate
for Washington’s dictates. First on the list is the mailbox monopoly. As congressional auditors
described in a 1997 report, fedpols “enacted the statutory mailbox
restriction in 1934 to protect the former U.S. Post Office Department’s revenue
and keep unstamped matter out of mailboxes. The law was intended to stop
businesses from delivering or using private carriers to deliver mailable matter
to mailboxes without paying postage, which reportedly deprived the former Post
Office Department of considerable revenue. In 1981, the U.S. Supreme Court
upheld the constitutionality of the law.” Shapiro’s analysis noted that the
USPS borrows “from the [Federal Financing Bank] at subsidized rates and with
the backing of the full faith and credit of the U.S. Government.”
more. Congressional researchers found that the USPS “pays no federal, state, or
local taxes on its income, sales, purchases, or property. Unlike private
companies, it is immune from most forms of regulation, such as zoning, land use
restrictions, motor vehicle registration [and] parking tickets.” Revenue from
the federal “corporate tax” it pays is dumped into the Postal Service Fund,
which is then returned to the USPS. (Seriously.)
the post office, reorganized as a quasi-government entity in 1970, had a
positive net income until 2006. Well into the epoch of widespread email, the
service treaded water -- aided, it should be noticed, by not funding its
retirees’ healthcare costs. But when technology advances hooked up with the
Great Recession, the USPS entered an inescapable death spiral. Can any credible
argument be made that first-class mail will ever rebound? And with 78 percent
of its costs linked to an overwhelmingly unionized workforce, is there any
realistic chance for meaningful cuts to labor expenditures?
service is pinning a lot of hope on mission creep. Its postmaster general, The Wall Street Journal recently
reported, is “pushing Congress to green light the shipping of alcoholic
beverages. She also wants to expand grocery delivery and offer more Sunday
try. But it’s too late. UPS, FedEx, and local delivery firms are more than
capable of handling the explosion of package delivery generated by e-commerce.
Honed by the efficiencies fostered by the crucible of market competition,
private-sector providers do it better, and cheaper. (Imagine what they would
accomplish if permitted legal access to mailboxes.)
borderline legitimate justification to retain a portion of the USPS is to serve
remote regions. But every decision involves a tradeoff, and living in the
sticks is a choice. City- and suburb-dwellers face traffic congestion, higher
taxes, and a greater risk of crime. Rural regions -- where fewer and fewer
Americans live -- will suffer, somewhat, if the USPS goes away. So be it.
Public policy can’t make everyone happy, nor can it achieve complete fairness.
(When it tries, the consequences are usually undesirable.)
immediately abolish the USPS in high-density areas, and sell off its considerable
assets. (Refund the receipts to taxpayers.) Establish a schedule for the
phase-out of post offices and mail delivery in non-metro regions, and stick to
the plan, despite the inevitable squealing.
Constitution grants Washington the power to “establish Post Offices.” But it’s
not a requirement, any more than is the issuance of “Letters of Marque and
can’t be fixed. Letting it continue means billions of dollars in bailouts.
Something better isn’t on the way -- it’s already here.
D. Dowd Muska (www.dowdmuska.com) writes about government, economics, and technology. Follow him on Twitter @dowdmuska.
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