No more credit card offers on Saturdays....

No more credit card offers on Saturdays….

Regarding the USPS decision Wednesday to stop Saturday mail delivery, Ron Nixon at the New York Times writes,

The post office said a five-day mail delivery schedule would begin in August and shave about $2 billion a year from its losses, which were $15.9 billion last year. The Postal Service would continue to deliver packages six days a week, and post offices would still be open on Saturdays. Reducing Saturday delivery is in line with mail services in several other industrialized countries like Australia, Canada and Sweden, which deliver five days a week.

This move has not come without opposition, however. Nixon continues,

Whether it will succeed is difficult to predict. Many lawmakers view the Postal Service as the quintessential government service that touches constituents almost every day, and rigidly oppose any changes. Also, postal worker unions hold sway over some lawmakers who are influential in writing legislation that governs the agency.

Again, he reports,

Most Americans support ending Saturday mail delivery. A New York Times/CBS News poll last year found that about 7 in 10 Americans said they would favor the change as a way to help the post office deal with billions of dollars in debt. The Obama administration also supports a five-day mail delivery schedule.

But three postal unions and some businesses on Wednesday called the move to five-day delivery misguided.

He goes on to note, “Many companies said ending Saturday delivery would have a devastating effect on their businesses.”

This sounds like a dire situation. Faced with “a requirement that it pay nearly $5.5 billion a year for health benefits to future retirees” and a 37% decline in first class mail since 2007, the postal service has ceased to be profitable as it stands, despite consistent yearly increases in the price of stamps. Small businesses may be threatened; Nixon reports that Ricardo Rolando, president of the National Association of Letter Carriers, has additionally claimed that stopping Saturday mail “would be be particularly harmful” to “rural communities, the elderly, the disabled and others”; shouldn’t something be done to fix this problem?

Well, that depends. While repealing the healthcare mandate might help the USPS continue mail service on Saturday, or while other legislation may be able to prevent the postal service from doing what it thinks needs to be done to secure its financial stability, there is a bigger problem beneath the surface.

As Matthew Mitchel of the Mercatus Center notes in his thorough report last summer on the negative economic and social effects of government privilege,

The United States Postal Service is a case in point [of monopoly privilege]. While the U.S. Constitution grants Congress “the power to establish post offices and post roads,” it does not, like the Articles of Confederation before it, grant Congress the “sole and exclusive right” to provide these services. By the 1840s, a number of private firms had begun to challenge the postal service monopoly. Up and down the East Coast, these carriers offered faster service and safer delivery at lower cost. While the competition forced the postal service to lower its rates, it also encouraged the postal service to harass its private competitors: within a few years, government legal challenges and fines had driven the private carriers out of business. More than a century later, in 1971, the postal service was finally converted into a semi-independent agency called the United States Postal Service (USPS). Its monopoly privileges, however, remain. No other carriers are allowed to deliver nonurgent letters and no other carriers are allowed to use the inside of your mailbox.

Why is the plight of small business, the disabled, the elderly, et al.—if such a plight is as bad as union leaders and others make it out to be—entirely in the hands of one institution with government granted monopoly power? If they had not pushed out the competition in the nineteenth century through government privilege, and if they did not retain many such monopoly rights today, no small businesses, elderly, disabled folks or anyone else would have been pushed into a position of dependency.

In a free market, businesses would be able to compete with one another to be the most efficient and effective mail delivery service, and if one business failed, others would be there—or others would be started—to fill in the gap in the market. Human beings, endowed by God with creativity in accordance with his image and made to cultivate the resources of the earth for his glory, ought to be free to creatively meet the needs of others, such as mail delivery, but that is not the situation today.

The deeper postal problem in the United States is not that the postal service cannot afford to continue delivering mail on Saturdays. Rather, the problem is the privilege that granted them exclusive right to do so. Nevertheless, as Mitchell notes, the USPS only has exclusive rights over “nonurgent letters,” so perhaps the private sector can still pick up the slack for small business, the elderly, the disabled, and others who have urgent deliveries that must be received on Saturdays.

Just don’t expect them in your mailbox, because that’s still illegal.

  • http://www.facebook.com/heinz.hochrein Heinz Hochrein

    You leave out some important facts, the universal service mandate is a huge concession in order to have that monopoly. Private carriers are profit driven and would exclude deliveries because of location. Also the post office cannot come in with price increases whenever it wants to because there are laws in place to prevent this. The USPS is supposed to be revenue neutral – meaning not making a profit by keeping postage affordable and provide universal service at the same time.

    • http://www.facebook.com/profile.php?id=1060874428 Dylan James O’Brien Pahman

      The universal service mandate is also based upon a narrow-minded conception of human ingenuity. So long as there is a demand for someone in the hinterlands to receive mail, there is profit to be made by someone. Profit motivates service, not the other way around. And free competition drives down prices. Local mail delivery businesses could be started in a central location for remote communities and receive and distribute the mail that statewide or national institutions might not be able to profit from. Indeed, private mail delivery businesses would naturally be guided by the principle of subsidiarity and could solve the problem while remaining profitable.

      • http://twitter.com/MikeUehlein Mike Uehlein

        What kind of company would step in? UPS and FedEx currently pay the USPS to run packages out to rural areas (commonly referred to as the “last mile”) as those routes simply aren’t profitable. The USPS loses money on those, but that’s because they weren’t designed to make money or profit, but to exist for the common good. Universal service means that the USPS, for the same prices across the board, can deliver to either the inner city, out in rural communities across the country, or anywhere in between, guaranteed.

        So, sure, maybe someone would step in to fill a gap, but at the cost of $10-20 per piece of mail? Maybe just one day a week?

        A few steps that could be taken to ensure the sustainability and growth of the USPS:
        1. Eliminate or recalculate the retiree health benefit pre-funding mandate. It’s unreasonable and no public or private entity faces a similar burden.
        2. Allow the USPS to raise rates as they wish, or at least give them more flexibility in setting rates. This would allow them to truly “compete” with other delivery services, just like you want them to.
        3. Also, give the USPS freedom to innovate and introduce new products. They’re seeing huge growth in parcel service over the past few quarters, finally moving onto UPS and FedEx’s turf. They’ve also partnered with Amazon to do same-day delivery and are expanding their parcel service into Sundays as well. More freedom to do these exact sort of innovations will help the USPS to thrive and adapt in the 21st century, instead of trapping them in what they’ve done over the past 50 years.

        • http://www.facebook.com/profile.php?id=1060874428 Dylan James O’Brien Pahman

          Again, I’m not really objecting to improving the USPS. Perhaps some of your suggestions would be good for them—not my concern.

          All I’m pointing out is that they are at the mercy of legislators by their own choosing in order to push out the competition and enjoy partial monopoly privileges. In turn, certain people may be at their mercy to receive urgent mail on Saturdays. If they were to let go of those privileges and focus on what they can sustainably do, I do not see what the problem would be for them, and in the meantime small, local mail carrier businesses might be started to pick up the slack. After all, there would be a demand. Logistically, they could set up a hub somewhere that the USPS is willing to deliver to, and then deliver all the mail to local mailboxes for a markup to cover costs and make a little profit. It would cost people in some rural areas a little more, but I do not see why it would be near as expensive as you suggest.

          Alternatively, more people could rely on PO boxes as well, assuming they or someone they know can pick up their mail. This is a problem that does not require a national level institution with government favors.

  • http://www.facebook.com/people/Val-Nostdahl/1025990186 Val Nostdahl

    goggle free books- The Post Office, its past record, its present condition and its potential relation to the new world era, Daniel Calhoun Roper, assistant chairperson united states tarriff commision, first Assitant Post Master, 1913-1917, 1970 the great postal strike took place so postal workers who had been working 3 jobs or on welfare could finally get a good wage compared to the rest of the country, thus collective bargaining was instilled more and the no strike law ensued, in 2000, 2001, postal letter carriers were made to pay in to their retirement systems 15 percent more for the 1997 budget reconcilliation act, both sides of congress and the President thanked them for their sacrifice, the fers system and csrs then were overfunded or overpaid, fers by 15 billion dollars and csrs by some 140 billion and then the postal accountibliy and enhancement act took place, thereby taking another 5 billion a year from postal budget that usps workers helped earned in profits, this was lobbied by corporations that wanted to destroy the usps, aparently they want more of the piece of pie, here are the links leading up to the current situation, http://www.awpu3800, PA first area tricounty local, library , stress in the workplace articals, includng how the ongoing violation of the usps guiding principles are creating a toxic work environment, 2008, http://www.billburrasjournal.org- misc have to google, and then scroll down the elevator page, and read phoney excuses for diverting usps revenues, then go to ALEC/Koch cabal the privitization of USPS for Ups and FedEX, bob sloan, vltp, 2012, examiner.com, Tim McCown artical , behind all the schemes and lies of the privitization of USPS, the American Michigan Postal Workers Union- the truth about the postal crisis, http://www.savethepostoffice.com,

    • http://www.facebook.com/profile.php?id=1060874428 Dylan James O’Brien Pahman

      This is interesting but it does not really get at the point of my post. The point is that the private sector ought to be allowed to compete with the USPS, not that the USPS should be eradicated (unless, of course, it is inefficient and unprofitable). The fact that mail carriers do not have alternative options for employment and that their livelihood is threatened every time the USPS is in trouble is also a result of the monopoly. Were there other private mail services, letter carriers could seek employment elsewhere. They too are at the whims of legislators due to the exclusive privilege granted to the USPS.

  • http://www.jordanballor.com/ Jordan Ballor

    Speaking of privilege, I’m glad to see that the USPS has finally stopped “privileging” Sunday and started to respect the Sabbath as well. It seems that Sabbath observance has not always been respected as a valid reason for exemption from working on Saturday: http://www.theyeshivaworld.com/news/archive/10826/Court+Rejects+Jewish+Postal+Worker's+Suit+over+Work+Schedule+.html