Tuesday, September 6, 2011

US Post Office: Time to Mail It In?

When I first got out of college and began paying attention to the world, I recall expressing my bewilderment, to anyone who would listen, that the post-office could take my correspondence and deliver it to the other side of the country for a mere 22 cents.  It struck me as an unsustainable model that, without certain government mandates and exclusive advantages, could never survive in a free market.

Now it's 2011 and my bewilderment has persisted for 25 years. In fact, each time that I go to my mailbox to bring in the latest load of mail order catalogues and pre-approved credit card offers, I shake my head and mutter.  I gripe quietly that our inexpensive postal rates are essentially a subsidy to support advertising and to promote hyper-consumerism.

In the 1990's, I worked for a company that was one of the major sponsors of the Olympic Games.  This was a tremendously expensive undertaking and many of us, who had direct responsibility for leveraging the sponsorship investment into a return, felt that the money had been largely wasted.  At that time, the US Postal Service was one of the other major sponsors.  I'm still shaking my head.

Now I see that the US Post Office cannot sustain economic viability and many are wringing their hands in search of a solution.  Good thing I figured it out in 1987 -- here's what we do:
  • Deliver the mail only half as often, with half the field force.  Since 80% of the USPO budget is labor, this will yield significant savings.  If it absolutely, positively has to be there overnight, you know what to do.
  • Close most (if not all) of the physical post-offices.  The packaging and weighing services that we all sometimes need are widely available through those ubiquitous private "mail-box" stores.
  • Sell off the prime real estate that many post offices now occupy.  Use those funds to pay up all the pension/obligations in a pre-negotiated agreement with the union whereby the current workers get their benefits protected and those hired in the future get market-competitive compensation.
  • Raise the first class postage rate from 46 cents to about $2.50. I know the junk mail industry will scream but the tree huggers will rejoice.
I know what you're thinking.  All those jobs eliminated?  At a time when unemployment is so high?

Don't worry, it will be a boon for the private parcel companies who will need to add jobs as they gain volume.  Advertising budgets will shift from direct mail to other communication avenues and create jobs in the higher tech industries where all the young people want to work these days.  And don't forget, remodeling of 32,000 post offices will require lots of planning, construction, and decorating labor.

The US Postal Service is a great institution, replete with nostalgic value and proud history.  It is also based on a flawed model to provide a service that is increasingly not needed.  I say it is time to dismantle it.


  1. Jeff Ryer9/09/2011

    Blasphemy !

    Step one should be to immediately stop Saturday delivery. The labor and fuel costs alone must total at least $1B per year for this one day......

  2. Winnie9/12/2011

    Hmmmm . . . if we dismantle the Postal Service wouldn't your stamp collection skyrocket in value?

  3. Anonymous9/18/2011

    Herman Cain for President

  4. Anonymous10/04/2011

    574,000 people work for the USPS. Basically you want to cut out half, let's say that ultimately ends up being 40% of payroll, thats almost 230,000 employees. The UAW has 300,000 active members, and it was a BIG deal when it looked like most of them might be looking for jobs. If the only jobs available are going to be in higher tech industries, who is going to train these letter carriers? The jobs opened up in those industries when the post office closes will not go to the postal workers who lost their jobs. Until there is a model that educates Americans so they are at par with the jobs in supply, this would just be adding to the unemployment line.

  5. I guess Anonymous has it figured out. In fact, we should generate some additional, money-losing, government supported business models that require lots of unskilled employees so we can put everyone to work.

  6. Jeff Ryer10/05/2011

    And .... I say we get rid of machine excavators and other construction equipment. Dig ditches by hand and we can employ everyone on the planet...

  7. Two months too late, maybe, but I have to respond to Den's reply which I fear came from a misinterpretation of my original point. I guess that unmasks me as "Anonymous 10/4" (let the record reflect that I was NOT anonymous 9/18... wouldn't ever post that even sarcastically)

    My point was NOT to defend the post office. i agree that it has failed and is a bad business model. I was implying that the process of removing it should be akin to removing a dam, not like removing a band-aid.

    and my point was also about education. there are many job vacancies in the country right now, but when employers report that 85% of employees (WITH a college degree) are not qualified for their positions at point of hire, there is clearly a problem with skill training. and its not entirely the fault of higher education. colleges report that a third of students need remedial education, which means they aren't learning what they should have in high school, because they weren't taught the basic concepts for it in elementary school.

    just because i do not support the post office being closed immediately does not mean i support the post office or like-structured government endeavors. its elimination needs to be gradual and delicate so as to not cause any chain reactions on the economy.

  8. if you are curious, a summary of the source i used about 85% of employees not being qualified:

    "Only 16% [of employers] say that applicants are “Very Prepared” with the knowledge and skills they would need for the job. 63% say applicants are “Somewhat Prepared” and another 21% say applicants are unprepared."

    (this equates to 84 (sorry) percent of employees are, at best, not fully prepared for their positions. I will concede a little bit of spin on that stat, but it IS interpreted by professionals in higher ed, including myself, to mean "84% of students are graduating unqualified". click my name for the full report. there are a bunch of good stats in the PPT)