What is the United States Postal Service (USPS), and where did it come from?
Originating in the late 18th century, the USPS has roots that tie all the way back to the Second Continental Congress, where Benjamin Franklin was appointed as the first postmaster general. Through the Constitution, Congress was given the power “to establish Post Offices and Post Roads”, fostering a system of secure communication between the Government and American citizens. As defined by the 1971 Postal Reorganization Act, the USPS is “an independent establishment of the executive branch” of the United States Government. The USPS is responsible for providing reliable, prompt, and affordable mail service to all residents of the United States.
Why should we privatize the USPS?
With the rise of social media and digital communication, the market’s demand for mail service has been dying out at a staggering rate for over a decade. Within just a 12 year span (2007-2019), the USPS has lost approximately $69 billion. Although the USPS has accumulated a massive debt, the independent agency is strongly protected through government regulations and laws. As a part of the government, the USPS receives various benefits, such as tax exemption and federal loans (these luxuries are not offered to private businesses). According to a report by the U.S. Government Accountability Office (GAO), the USPS is free from “state and local income taxes, property and real estate taxes for USPS-owned properties, sales and use taxes, vehicle registration fees, tolls, state franchise taxes, business licensing fees, franchise fees, and business taxes.” In addition, the USPS is legally permitted to borrow up to $15 billion from the U.S. Treasury. These privileges act as life support for the institution to stay afloat, but many people find it pointless to fuel time and money into the USPS, as it is a sinking ship inadequate at sustaining itself. In just 9 years (2009-2018), product volumes of first-class mail have dropped by 26 billion items, equivalent to a 31% decrease. Marketing mail and periodicals have also taken a hit, experiencing a 6% and 38% decrease, respectively. This trend stems from a general shift in American society, one where people are turning more towards digital media while moving away from newspapers, letters, and physical advertisements. As a result, revenues earned through operating first-class mail, marketing mail, and periodicals have all decreased by billions of dollars. With plummeting revenues, the USPS is forced into even more debt, and the vicious cycle of borrowing and spending begins once again. Even with their falling revenues and decreased product volumes, the USPS has actually increased their operating expenses during this 9-year period, with an increased spending of 2.6 billion dollars. Clearly, there is an issue here which must be addressed. Despite their astronomical debt, they continue to spend recklessly, robbing the government of valuable time and money.
But the rise of digital media isn’t the only thing to blame for the USPS’ extensive debt. The debt is also widely attributed to the 2006 Postal Accountability and Enhancement Act – a law which mandates the USPS to pay for retiree health care benefits, 75 years into the future! This means they are paying for people who haven’t even been born yet. As calculated by the GAO in late 2019, almost 75% of the USPS’ $160.9 billion debt comes from retiree benefits. Clearly, the USPS is incapable of paying for its own expenses, especially with such dire revenues. Instead, it leeches off The Postal Service Retiree Health Benefits Fund. However, if the USPS continues on this downwards trend, the fund is projected to be fully depleted by 2030, creating even greater complications for the dying agency.
Another argument for privatization is that the USPS is currently a monopoly; it holds the right to deliver letters, has exclusive access to mailboxes, and exercises the power to issue federal postal regulations. Since the USPS has a monopoly in mail service, this restricts other companies from trying to advance the field, preventing the services from becoming more modernized and efficient. If the USPS were to be privatized, it would be put on an equal playing field with other competitors, resulting in increased innovation and economic growth. Putting the USPS into the hands of the market would allow for its fate to be decided through supply and demand, naturally leading to more affordable and accessible services. Additionally, it would force the USPS to allocate its money and resources in smarter ways, as it would no longer be able to borrow money from the government.
Why shouldn’t we privatize the USPS?
Founded in 1971, the USPS is established as a reliable way to facilitate communication across the United States. Compared to UPS, the USPS is much more cost-effective – shipping packages at faster and cheaper rates – especially for packages under 13 pounds. When calculating the costs of shipping a 13 pound package across two zip codes using both the UPS’ and the USPS’ fastest services, the disparities I found were significant. UPS charged $94.85 for their Next Day Air Early service, whereas USPS only charged $48.90 for their Priority Mail Express 1-Day service – making the USPS almost half the price. Furthermore, through the USPS, anyone, regardless of location, can mail a letter to any address in the United States for just 55 cents! Because of this, the USPS remains an affordable option that low-income people rely on to send letters and packages and to support their basic mailing functions. This can especially help small businesses, as they often can’t afford to spend a fortune solely on shipping costs.
Additionally, since the USPS doesn’t run for profit, it provides service to all Americans, despite their location, race, or socioeconomic background. According to the USPS, it “delivers to every address in America, from the biggest cities to the smallest hamlets.” Its scope reaches to around 42,000 zip codes across the country. If the USPS were to be privatized, it could prioritize its service to places that generate the most profit, significantly harming low-income neighborhoods and those with less political clout.
Another group that relies on the USPS’ affordable mail service is inmates. According to the Prison Policy Initiative, there are currently 2.3 million people incarcerated in the United States, and their main form of communication is through written correspondence. Although the USPS’ rates have already been raised in the past years, the privatization of the USPS would most likely lead to dramatically increased postage, disproportionately impacting incarcerated people who suffer, working hours of prison labor a day, just barely making enough to provide for their basic needs. Privatizing the USPS would raise costs for these marginalized groups, further exacerbating the racial and socioeconomic divides in this country.
Political mail is another component of the USPS that is likely to be affected. Political mail consists of flyers, brochures, postcards, and letters sent from a political candidate, party, or campaign. This form of communication is extremely powerful and can make a massive difference in determining the outcomes of any election. The USPS currently offers a variety of ways to send political mail across a broad range of audiences: Every Door Direct Mail, First-Class Mail, and USPS Marketing Mail. These methods help facilitate communication between political candidates and American voters in a cost-effective manner, making resources much more accessible to the average voter. Privatization of the USPS could significantly harm this system, either through corporate corruption or through overall unaffordability.
Although it is impossible to say what will exactly happen in the United States if the USPS were to be privatized, we can get a solid prediction of what might happen by looking at models from Europe. Most European countries have either fully or partially privatized their mail service, and as a result, they have experienced a slew of different concerns. According to the UNI Global Union and the UNI Post & Logistics, Europe has faced net job losses and wage cuts following privatization, with a 30% decrease in the number of jobs and a 40% decrease in wages from 1998-2013. Following liberalization, European postal services have failed at increasing quality and affordability. George Bach, a Member of the European Parliament, states, “Once again, the workers bear the costs of failed attempts to improve services and drive down costs. Postal services can simply not work effectively if their business is purely profit motivated.” Like most advocates for privatization, even the European Commission believed that “postal liberation would result in net job gains, but the opposite has occurred.” Therefore, despite what one may think, privatization does not guarantee any benefits and may even exacerbate and create new problems. Exemplified by the many examples in Europe, the impacts of the privatization are, in fact, unemployment, poorer quality, lack of innovation, and increased costs.
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Sophie is a high school senior from Westchester County, New York. She is involved in various youth organizations such as The Peahce Project, Dear Asian Youth, Junior State of America, and Asian Business Society. In the future, she hopes to study marketing, business management, and behavioral psychology. Through Zenerations, she hopes to bring awareness to various social issues and empower the youth to chase after their dreams.