Going Postal: Another rate increase and more wage hikes

(Chuck Muth) – The Wall Street Journal published a damning editorial on Monday against the government’s postal system:

With the economy still hobbling along, few industries have pricing power. But neither rain, nor sleet nor recession can stop the United States Postal Service, which wants to raise the price to deliver a first class letter to 46 cents from 44 cents. Congress should refuse and finally force this public monopoly to adapt to the 21st century.

Next to the public schools, the postal service may be the most inefficient monopoly in America. The post office lost $3.5 billion last quarter, and losses are expected to be a cumulative $238 billion over the next decade, by its own admission. Postal rate increases are supposed to rise under the law only at the rate of inflation, but this latest request is four times the increase in the consumer price index. The federal Postal Rate Commission will decide on the request in early October.

Meanwhile, mail service to captive customers keeps deteriorating. The snail-mail system now often delivers not to the doorstep but to cluster boxes. It long ago ended twice daily delivery to most business and residential addresses, and it now wants to eliminate Saturday delivery—which, alas, probably makes sense given its declining revenues.

The Journal notes that mail volume continues to fall while the postal bureaucracy continues to refuse to adapt to the new reality of high-tech communications. In addition, they system is paralyzed and crippled by union work rules, wages and benefits.

“For years Congress has caved in to union demands for higher wages while impeding closure of obsolete local post offices,” the Journal notes.

This only makes the unions more militant. In an interview recently with Government Executive magazine, APWU president William Burrus laid out his negotiating strategy: “More. More control over activities at work, more money, better benefits—we want more.”

More? Today the average postal worker makes $83,000 a year in wages and benefits, roughly 50% above the average compensation for private workers, according to federal wage data. Those benefits are already so generous the post office could save $560 million a year if the mailman paid the same 28% share of employee health premiums that other federal employees pay, which is still below the norm in the private economy. Normally when a company is losing $16 billion a year in revenues, unions see the need for concessions.

Not the postal union. They’re protected from market forces by Congress and the federal government. They’ll never concede a dime, which is why it’s WAY past time to open up all postal services and first-class mail delivery, not just express delivery, to private competition.

“If someone can deliver a letter for less than 46 cents or a postcard for less than 30 cents, by all means let them,” the Journal concluded. “Contract with Wal-Mart and grocery stores to sell stamps and collect packages. The postal service won’t avoid its coming financial catastrophe by continuing to raise prices, but it might if it has to compete for customers.”

So let it be written; so let it be done.