It is time for Americans to get comfortable with the idea of getting mail every other day — or maybe not at all.
The U.S. Postal Service is awash with red ink and must again trot out another increase in the price of a first-class stamp. It is set to go up a penny to 45 cents in January.
Yet, the government reports that this step won’t even really begin to solve its financial issues. The 2011 projected losses for the Postal Service have not been released but it lost $8 billion in fiscal 2010. The 2011 losses are expected to be higher.
Last month there were reports circulating that the Postal Service was at the precipice of default, which is a precursor to bankruptcy. Some suggest that sometime next year it may not have the money to gas up trucks and meet payroll.
So the issue isn’t the price of a stamp. A bigger increase — even a dime — would likely be swallowed by the paying public. After all, one poll this week showed that Americans are about split on whether they are okay with yet another penny increase. And this is the 10th increase in the price of a stamp since the calendar turned to the year 2001. So we are becoming price insensitive for the service.
A bigger increase isn’t going to happen without Congressional action. Increases in the price of a first-class stamp are tied to inflation metrics by law, so that law would have to be changed.
But just raising the price of a first-class stamp by a huge amount alone won’t solve things. That would just be a temporary budget-balancing exercise. And it actually would quicken the demise of the Postal Service as competitors become even more attractive alternatives.
The real issue is that the world is changing at an unprecedented pace and the Postal Service — and most of the rest of the federal government — is simply unable to react like a real business and adapt to the marketplace.
The real problem, of course, is that “snail mail” is getting more outdated every day. Email and the ease in which documents can be reproduced and sent electronically have destroyed the economics of the old U.S. Mail business model. Throw in social media — Facebook, Twitter, etc. — and the fact more and more people pay bills online and it is clear that revenue from first-class stamps is going to continue to decline no matter what the price of a stamp becomes.
Congress needs to step in and force changes that have been kicked around for the past several years.
The postmaster general wants to eliminate mail delivery on Saturday. He wants to close 3,700 post offices and distribution centers. That means more than 100,000 jobs would be eliminated — a 20 percent reduction of the workforce. He is on the right track.
But without some sort of Congressional action, the latter is not likely because of union contracts that have a no-layoff clause.
But layoffs are the only solution. For example, a New York Times report cited that 80 percent of Postal Service costs are in labor. Its non-digital competitors are much less — UPS is 53 percent and FedEx is 32 percent. In the real world of business that is called a competitive disadvantage that leads to a business failing and all losing their jobs, whether they are in a union or not.
And, of course, the postal service’s virtual competition has no labor overhead. And technology will only continue to advance rapidly to move information — which is what mail really is — faster and better than ever.
Congress needs to step in and force solutions. Force the closures and eliminate the jobs. Go deeper on the day cuts — maybe three or four days a week is often enough for snail mail.
Some would argue that eliminating these jobs would be another blow to the national economy. Others would argue that not having a post office in some towns would be a hardship. Yet others would say throwing out a negotiated union contract is wrong.
The answer to all of that starts with a question.
If the Postal Service ultimately defaults and is unable to meet obligations and shuts down, who is hurt then? The answer is simply “all of us.” Someday traditional mail delivery may not be necessary at all. But our economy needs mail delivery for now. To stand by and just watch it collapse is irresponsible.
Americans need to get used to less service, less often and pay a little more or figure out how to avoid having to use the mail at all. Congress needs to make business decisions and stop the losses and provide the service it can afford.