TheBeginning of the End for the Postal MonopolyThe Postal Service has been a governmentagency since 1775, and since 1872 it has been illegal for anyone but governmentemployees to deliver a letter. Because of this and many other reasons,the USPS is a prevalent example of a government-controlled monopoly. TheUnited States Postal Service is the largest postal service in the world.
With over 800,000 employees (778,171 being part-time lobbyists), it isthe USs largest employer. In the past few years, the Postal Servicesprofits have risen and productivity has declined. This essay will discusswhy this is happening, and look deeper into the government-controlled monsterthat is the Postal Service.
In the 1980s, few scholars focused onthe Postal Service, and today there are many. This is because of all ofthe controversial issues that have been discovered regarding it. The USPShandles over 43% of the worlds mail volume, and Japan is in second with6%. The USPS is also the largest airline shipper in the United States.
The USPS delivers about 102 billion pieces of first class mail every year,and 20% of these letters arrive late. The average household gets 24 piecesof first-class mail every week, so almost 5 of these every week arrivelate. In New York City in 1998, only 52% of the mail were delivered ontime. Swimming champion Mary Meager had her parents send her the 2 goldmedals that she won in the Olympics; the medals vanished when her parentssent them via USPS Express Mail. Why are these facts so appalling? Mostof it can be blamed on the unproductive postal workers.
Postal workers, who are considered unskilled,make over $35,000 a year, and that number keeps increasing. These are veryhigh wages for an unskilled worker. The workers also waste a considerableamount of time. A survey by the Postal Inspection service discovered thatthe average letter carrier wasted 1? hours every day. Basically,23% of all postal workers time is unproductive. A GAO study found thatthe average worker takes 50 days of paid leave every year. And sometimes,mail sent with the USPS doesnt even get delivered.
There are numerous stories of Postal employeesstealing mail. For instance, in Chicago, 2,300 lbs. of undelivered mailwere discovered at a postal workers home. Once in Rhode Island, 94,000letters were found buried at a letter carriers home. A Colorado carrierwas arrested after 3 tons of undelivered mail was found at his home. Theseare just a few of the stories of the workers keeping mail as their own.
And some undelivered mail isnt even because of employees stealing mail.
During the 1970s, the CIA opened mailroutinely. The reason behind this is because of the spying going on atthis time between the U.S. and Russia, but this is still unnecessary. APostal Inspection Service audit found properly addressed mail dumped inthe trash at 76% of the Post Offices visited. This number is completelyunnecessary and uncalled-for. At USPS headquarters, there are 11 membersof the board and 50 economists, accountants, and lawyers on the commission.
With all of these workers, you would think that the service wouldnt behaving problems like this. The Postmaster General is the head of the service.
The current Postmaster General is Marvin T. Runyon. Former Postmaster GeneralWilliam Henderson had this to say about the Postal monopoly: “…I believethat the Postal monopoly will not last forever.” Hopefully, he is right.
According to Henderson, one in every 200letters is delayed or missorted. In 1970, the USPS created the Postal ReorganizationAct, trying to be redeemed. This was when the service officiallybecame the United States Postal Service. Before that, it was just the PostOffice. This Act had limited accomplishments. When the service was losingvast amounts of money in 1979, there was talk of privatizing it, but nothingpulled through. Many people hope that the service would once again considerprivatization. If the Postal Service did privatize, it would be the tenthlargest company in the U.S. The USPS attempted reorganization again in1983, and once more in 1993. Both attempted reorganizations failed miserably.
The Zone Improvement Plan (ZIP) codes wereintroduced 1990s; this code added 4 non-required digits, for 9 in all.
Since 1958, the price of a postage stamp has increased in 1963. In theearly by 825%, and in the last 20 years, that price has increased by 18cents. On January 10, 1999, postage rates for non-profit organizationsincreased by an average of 9.6%, while business rates only increased by1.79%. Is there some particular reasoning for the USPS to pick on non-profitorganizations? So far, there is no proof of this.
There are over 39,000 post offices in theU.S., and about 130 million delivery points. The USPS processes about 38million address changes annually. In some rural areas, mailboxes are placedas far as 40 miles away from the home, for the convenience of the delivererand the inconvenience of the homeowner. This seems strange because UPSand FedEx both target rural areas. In fact, 40% of UPS delivery spotsare in rural areas. The Postal Service receives close to 50 times the amountof mail of FedEx and UPS combined.
There are also some unfortunate laws thatthe Postal Service has helped Congress pass. By law, the mailbox that youbuy and install on your property belongs to the government. The PostalService reserves the right to cut across peoples lawns when deliveringmail and postal vehicles are immune from parking tickets. The USPS reservesthe right to search the mail for “contraband” something that looks funnyor out of place. UPS and FedEx are both strongly against these so-calledcontraband searches. Federal Express and the United Parcel Service arethe two main competitors the Postal Service, but there are also 300 otheralternative delivery firms. By law, private companies must charge at leastdouble the amount that the USPS would charge for the same letter. Furthermore,the USPS has its own police force that can search packages sent throughcompetitors if it believes that the sender is violating the services monopolylaws. Of course, the USPS doesnt do this as much anymore after a lot ofbad press and over $0.5 million in fines. Private companies, unlike theUSPS, cant just raise their prices because of increasing costs.
How do these companies stay in business?Heres how the employees compare: The average UPS employee moves three-timesas fast as the average Postal deliverer, and the average FedEx employeemoves twice as fast. There is one manager per 10 workers at the USPS, comparedwith one for every 15 at FedEx. Other ways to send letters without usingthe Postal Service include fax and e-mail. It is estimated that 43% offaxes represent a diversion of communications of the mail, and in the 1990s,e-mail has also taken a chunk out of the Postal Service.
The Postal Service is entirely exempt fromcomplete compliance with the Occupational Safety & Health Administration.
Basically, the OSHA may not fine the Postal Service for unsafe workingconditions. This should not be, because their employees do a lotof stressful, repetitive tasks. In fact, in 1994, Postal Employees countedfor 29% of federal agencies working compensation claims. Also that year,the service paid over $521 million in workers compensation claims, deathbenefits, medical expenses, and other expenses.
The Postal Service tried changing its publicimage in 1997, spending millions of dollars on “Whats Your Priority?”ads for Priority Mail. In one month, they spent $275,000 on ads in theNew York Times, telling the public how hard they will “deliver for you”.
The ads seemed to pay off though; they have generated more than a $500million increase for Priority Mail. But unlike its competitors, PriorityMail 2-day delivery is not in any way guaranteed.
In the Postal Services latest cry for attention,they have introduced a new “Postal Notes” advertising campaign. These adstell little known facts about the service. For example, one ad says thatthe Postal Service uses donkeys to deliver mail to the bottom of the GrandCanyon, bush pilots to deliver to the Arctic Circle, and mail-boats foralong the bayous of Louisiana all for the price of a 33 cent stamp. Theseads have cost about $12 million.
The USPS also spent about $7 million tochange their long outdated logo to the “Sonic Eagle” in 1997, and almost$4 billion to put together over 5,000 pieces of automation equipment. Theservice spent $232.4 million of its $143 million budget on advertising,nearly $90 million over budget. Looks like the USPS thinks the only wayto get more business is through numerous advertisements. In 1995,the USPS owed the U.S. Treasury about $9 billion for borrowed money. Itis rare for the Postal Service to have more profit then debt. Surely notbecause they dont make enough, but because they borrow money in immoderation.
In fact, when the service turned a profit, like in 1995, it was only theeighth time during 24 years. Currently, the United States Postal Serviceowes the U.S. Treasury somewhere around $7.3 billion, not much differencesince 1995.
In one USPS ad, it says the following:”If it surprises you that the U.S. Postal Service is not funded by taxdollars, join the crowd.” This is terribly misleading though; contraryto popular belief, the government does fund the USPS. In fact, in 1996,the government gave the USPS almost $770.9 million. What do they do withthis money? They spend most of it, 84%, on its employees. The USPS netincome has gone down considerably every year. It has gone from $1.8 billionin 95, to $1.8 billion in 96, to $1.2 billion in 97.
Many people are urging the USPS to considerprivatization. Because of the vast amounts of money that it is losing,it may do just that. But until then, if the service continues at this pace,we can expect to see higher prices, longer zip codes, more unproductiveworkers, and the USPS even farther in debt.
