What Do Cuts at the Post Office Mean to You?
Would you pay $22 to $60 just to mail a letter downtown? The problems at the postal service may not be what you think.
As the second-largest employer in the United States (after Walmart) and the largest employer of union employees, the United States Postal Service is, to put it lightly, important.
As an affordable means for Americans to send and receive correspondence and packages, often next-day, the USPS is important.
As one of few government agencies deemed important enough by our founding fathers to spell out in the Constitution our Congress's "power to lay and collect taxes" for our postal infrastructure, the USPS is important.
As the only delivery service required to provide coverage to all corners of the United States, regardless of how remote or sparsely populated, the USPS is important.
The USPS has been picked on lately. Some politicians suggest that its employee benefits package is causing the agency to go broke. Some assume the USPS is poorly run or even that it wastes taxpayer money.
A taxpayer drain it is not; the USPS is fully funded by postage. Congress has authority over the USPS, but our postal service hasn't been taxpayer funded since 1970 (despite the Constitution's instructions).
While email, online bill pay and the recession most certainly have cut into its revenue, the postal service actually operates on a healthy business model; its woes are largely exaggerated and artificial. In fact, if the Postal Accountability and Enhancement Act (PAEA) of 2006 hadn't been signed into law by George W. Bush, the USPS would enjoy a $1.5 billion surplus instead of its massive deficit.
This devastating act requires the USPS to pre-fund, within 10 years, 75 years' worth of future health care benefit payments for retirees. The PAEA puts a burden on the USPS required of no other government agency, costing the agency $5.4 billion a year since 2006. The USPS has also overfunded a separate retirement account by about $6.9 billion.
Private Shipping Costs More
The USPS's financial woes have made the news over the past few months with talk of eliminating Saturday delivery, cutting jobs, and closing half of its 500 processing centers (including nine in Illinois) and many underperforming post offices. So far, none of these cuts are in the south suburbs, but could still affect us. Any or all of these actions would certainly slow First Class delivery, inconvenience millions of customers and perhaps compel many of us to turn to competitors, such as UPS and FedEx, for shipping.
UPS has a nifty time-and-cost calculator. As an exercise, I looked for some estimates for letter delivery, the same size letter that each of us can send with a 44-cent stamp. I entered a random mid-week, non-holiday delivery from Chicago Heights to downtown Chicago. The range, fastest to slowest: $60.36 to $22.69. For fun, I thought I'd check New Lenox to Davis, CA. The range: $74.33 to $26.62.
A 44-cent First Class stamp doesn't guarantee next-day delivery, but they delivered a Christmas card to Davis, Calif. in three days for $26.18 less than UPS would have charged.
The loss of First Class mail (or the postal service altogether) would create huge inconveniences or expenses for people who rely on the postal service to deliver bills and prescriptions. The same goes for small businesses that use the postal service instead of internal or private parcel services and people who send mail to Canada, including people who work in one country and live in another. Not everthing can be paid online—yet. (Postage on a recent letter to Edmonton set me back 85 cents. The UPS quote was $39.79).
The proposed postal service cuts have been pushed back until mid May. Hopefully a new plan will be in the works before then, preferably to remove or revise the PAEA. Cuts to the USPS would cause problems our economy can ill afford, hurting postal employees, businesses, regular citizens and the unemployment rate.