Economy

How You'll Get Screwed If Conservatives Kill the U.S. Postal Service

If USPS in its current form ceases to exist, the results will be harsh.

On April 24, members of the American Postal Workers Union (APWU) and other unions held 56 “Stop Staples” demonstrations in 27 different states. The postal workers, carrying signs that read, “The U.S. mail is NOT for sale,” were protesting against a privatization deal between the U.S. Postal Service and the office supply chain Staples.

Launched in October 2013, the deal allows non-unionized employees of 82 Staples stores to help sort mail. If the program is expanded later this year, that number could increase to 1,500 stores. In a press release, APWU said of the program, “Staples employees, who work for low wages and meager benefits—and who have received minimal training—operate these unsecured postal counters.” 

APWU sees the Staples deal as a step toward much greater privatization of the U.S. Postal Service, and they are right to be concerned, not only because of the interests of postal workers, but also, because the privatization or dismantling of the U.S. Postal Service will be terrible for American consumers and small businesses.

It’s no secret that times have been challenging for USPS. The increase in digital communications has resulted in many Americans spending much less on postage than 15 or 20 years ago. In 2006, a Republican-dominated Congress passed a bill forcing USPS to pre-fund future health benefits for retirees for the next 75 years (which Vermont Sen. Bernie Sanders has characterized as an “onerous financial burden”). To make matters worse, USPS has been facing the worst economic downturn since the Great Depression of the 1930s. And a combination of Republicans, Libertarians and neoliberal Blue Dog Democrats have been calling for drastic service cuts and privatization schemes. Ted DeHaven, budget analyst for the Cato Institute, a libertarian think tank, has repeatedly called for thetotal privatization of the U.S. Postal Service.

But if USPS in its current form ceases to exist, the results will be harsh, not only in terms of the job losses and loss of tax revenue (unionized postal workers pay a lot of federal and state taxes), but because of the hardships both businesses and consumers would suffer. The end of the U.S. Postal Service could mean more business for its two main privately owned competitors, Federal Express and the United Parcel Service (UPS). But to think either would offer a better deal to consumers is pure fantasy.

USPS is a government-run operation but is not taxpayer-funded—it is mandated by law to run like a business and turn a profit, but is subject to regulations and price controls and operates as a public service. Because USPS is governed by rules UPS and FedEx aren’t subject to, consumers and businesses benefit. USPS cannot charge more for mail delivery to one part of the U.S. than to another part of the U.S., but in a post-USPS America, all bets are off. And a comparison of USPS and non-USPS prices offers a glimpse into life without the U.S. Postal Service.

In late 2013—before the Christmas rush—Cheapism.com (a website specializing in cost comparisons) compared the cost of shipping large packages via the U.S. Postal Service, Fed-Ex and UPS. The website wrote: “Overall, we found there is no contest when it comes to price. In our shipping cost comparison, the Postal Service offered the cheapest rates almost across the board, from ground shipping to speedier options. It also stands out with free Saturday delivery and generally keeps up with its private-sector counterparts in areas such as on-time delivery and tracking.”

For years, UPS and USPS have been sharing resources. USPS deliveries can be sent from some UPS Stores, but when that happens, the store can jack up the prices all it wants. In 2009, the New York Times compared the cost of sending USPS deliveries via privately owned UPS Stores versus sending them via government-operated post offices: an eight-pound package sent via USPS Priority Mail from a UPS Store on Manhattan’s Upper East Side to Old Greenwich, CT, for example, cost $21 as opposed to $8.80 from a post office across the street. That package cost $19.90 via UPS Ground. If the U.S. Postal Service is dismantled the way Rep. Darrell Issa (the California Republican who heads the House Oversight and Government Reform Committee) and others want, that’s the type of price-gouging Americans can look forward to.

Attacks on government-operated postal systems are not limited to the United States: they have also been plaguing Europe and Canada, where Canada Post (Canada’s equivalent of the U.S. Postal Service or the U.K.’s Royal Mail) has announced it will be phasing out all home deliveries, even in major cities like Montreal, Toronto and Vancouver. And the EU’s negative experiences with mail delivery privatization demonstrate that it would be a huge mistake for the U.S. to go down that path.

In January, the Center for Research on Globalization released a report on neoliberal privatization of postal systems in the EU and found that overall, the result was one of “decline in services, increasing prices.” The Center found that in the EU, “The post office network has been drastically reduced and replaced with private partners such as grocery stores or gas stations, offering a reduced range of services. In Germany and the Netherlands, the former national post companies have completely given up operating their own postal outlets.”

The Center went on to say: “Prices for large customers such as banks, telephone companies and online retailers have decreased—not least because they can negotiate individual price rebates. But standard mail costs have increased in a number of countries…..In sum, post liberalization has not improved services and reduced prices as promised by the European Commission and others. Instead, liberalization has produced a few winners and many losers. The winners are private shareholders of former public monopolies, post managers and large customers, while the losers include private households, especially those in rural areas, and postal sector workers who have experienced liberalization as massive deterioration of employment and working conditions.”

The benefits the U.S. Postal Service offers businesses and consumers go way beyond the costs of shipping packages. UPS and Fed-Ex have very different infrastructures from USPS, and they aren’t set up to send an abundance of letters at a reasonable cost. The cost of sending a first-class one-ounce letter via USPS is now 49 cents, with 21 cents for each additional ounce. Those rates apply all over the United States, so if a resident of Miami needs to mail a check to someone 5,000 miles away in Anchorage, it costs just under half a dollar. If UPS or Fed-Ex were to take over those functions, rates would go through the roof.

The Cato Institute argues that privatizing USPS would make mail delivery more efficient in the U.S., but the facts don’t bear that out. UPS’ system is set up in such a way that while it can work well for large deliveries (for example, 20 boxes of goods sent at once), it offers poor, expensive service for small deliveries. Consumer complaints about UPS are numerous. On the consumer-oriented CustomerServiceScoreboard.com, UPS had 949 negative ratings on May 6 compared to only 92 positive ratings. That same day, Fed-Ex also had low marks on CustomerServiceScoreboard.com (225 negative ratings and only 20 positive ratings).

None of that is to say that USPS is without its shortcomings or inconveniences—namely, long lines at post offices. But some inconveniences are much worse than others. And when one misses an attempted delivery, waiting in line at a nearby post office isn’t nearly as inconvenient as having to travel 15 or 20 miles to a city’s main UPS center.

Let’s say a Philadelphia resident was mailed a package from out of town but missed the delivery person and had to pick the package up. If it’s a USPS delivery, the package can probably be picked up the following day at a neighborhood post office that’s likely within a one-mile radius. If it’s a UPS delivery and three delivery attempts have been made, it will be briefly held in the UPS center in South Philly before being returned to the sender. Philadelphia is a large city, and if one lives in the far northeast or far northwest part of town, that’s quite a hike. Unfortunately, that type ofinconvenience—having to travel 15 or 20 miles to pick up a package—is common with UPS all over the country. Waiting in line at a local post office is a much kinder fate than dealing with UPS, and millions of Americans will find that out the hard way if USPS continues to be undermined.

Some progressives, thankfully, have been outspoken defenders of USPS, including Bernie Sanders and Democratic Rep. Keith Ellison of Minnesota. MSNBC’s Ed Schultz has warned that privatizing USPS will be a financial hardship for small businesses, saying: “The destruction of the United States Postal Service is one of the top priorities of the Republican to-do list. They are doing all they can to privatize it…… Every radio station has in their budget shipping and delivery services, shipping and delivery expenses. Where do you think these expenses are going to go for small businesses in America if they cut the postal service?”  

Sanders, Ellison, Schultz and other USPS defenders are fighting against an avalanche of anti-USPS propaganda, but hopefully, enough Americans will join them in their fight. Imperfections and all, the United States Postal Service is well worth saving.

Alex Henderson's work has appeared in the L.A. Weekly, Billboard, Spin, Creem, the Pasadena Weekly and many other publications. Follow him on Twitter @alexvhenderson.