OK, I haven’t actually run any actual numbers on this. But in reading (again) about the imminent demise of the US Postal Service, I had some thoughts on how this quasi-public business maybe could work:
First and foremost, totally jack up the price for sending paper mail — to, say, $1.25 per standard item and up. Hell, why not $2? Doesn’t it seem amazing to you that you can have an actual, physical envelope delivered to a specific doorway, in many cases overnight, for only $0.44? I have no idea what the real price point is for the USPS for performing each standard mail delivery, but I have to think that it’s way more than $0.44. I say: Just price standard mail to cover costs plus a healthy profit margin, let the market shrink to what it will, and then continue on as the reshaped-yet-still-publicly-supported mail system. Raise the prices for packages too, but really just let paper mail prices spike high.
C’mon, we all know it: Most paper mail contains information that can be transmitted electronically. Why shouldn’t paper mail be an essentially premium service, something used mostly by people with money — in fact often used to send money-related documents with sensitive financial information? (Of course even these will likely be mostly transmitted electronically eventually.) I for one would love to get less paper mail, and I know many of the earth’s forests would probably second my vote.
Problem is, as described in the NYTimes article, a lot of legislative and union constraints are in the way of major USPS retooling. The big ones are union “no-layoff” clauses, and legislation preventing postage fees from being raised faster than inflation.
Plus, if these hurdles could be cleared, the big question is whether the USPS could actually survive in the much-smaller paper mail market that will remain. Could they? I don’t know. But it seems that they certainly have enough resources to leverage in being able to survive and compete in a reshaped market.
Mostly, I think it’s unavoidable that in the next generation or so, paper mail will be a luxury — an affordable one, but a premium service that many fewer people will use. If the USPS can retool now, it could continue to be an important player and an essential government service.
So, if I were in charge, I’d first focus mightily on amending the law that prevents the post office from raising postage fees faster than inflation.
And somehow I’d work on getting around the union “no-layoffs” clauses, which are simply untenable in any shrinking business. I’m often pro-union, but in my opinion this is a case of union overreach for sure. I wouldn’t go after other union benefits like pensions or wages, but layoffs are just gonna need to happen. Seriously, get real.
Sadly it seems that a priority strategy right now is to try to squeeze pensions — and in a way that makes me go, “Hmmmm….”:
Senators Carper and Collins do back several of the postal service’s main ideas to avoid default, including recovering around $60 billion that some actuaries say the agency has overpaid into two pension funds. Although the Obama administration is working closely with the senators to find a solution, it has signaled discomfort with the pension proposals, questioning whether the postal service really overpaid. —The New York Times, Sept. 4, 2011
Something in that milk seems to be, say, less than clean.
Please note: The above is a very quickly-considered judgment and just sort of a “snap-vision” of how I see this all playing out. I don’t mean to be glib about the legislative/union hurdles. But somehow some major change needs to happen or the USPS will simply go away. And as much as I hate dealing with real mail (both sending and receiving it), I would really be sad to see it go.