Tuesday, August 11, 2009

The Existing 'Public Option'

During a speech today, President Obama unwittingly made a case against his health care (er, health insurance) reform AND the U.S. Postal Service.

This comment hit home for I am one of 'those' that wants to privatize the post office. At one time, it made sense to have a U.S. Postal Service. But, not any more. Lax accounting, a bloated staff (the 3rd largest employer in the U.S. behind the Dept. of Defense and Wal-Mart), and a monopoly on 1st class mail make the USPS non-competitive.

Stamp prices have risen with inflation every year since 1970. Imagine if the cost of a phone call had risen that much or, heaven forbid, gasoline. New technology, sorting equipment and more efficient route planning should have taken costs out of the system. In fact, I am sure it has. Then that money is poured back into the labor pool. One estimate puts U.S. Postal Service wages at between 20-25% higher than comparable private sector wages.

Of course, it helps when you are exempt from paying taxes.


Ken said...

One thing that has hurt the post office in recent years is the lack of volume compared to the population. With more and more information going electronically, they are losing their economies of scale. The trucks and planes travel between cities regardless of the amount of mail on it. I apprecitate the fact that it is 44cents to send a first class envelope vs $8 with UPS or Fedex.

Phonecalls have not risen in price because they have gained economies of scale via digitizing and computerizing the phone calls. (No need for operators).
Gasoline, on the other hand is not really influenced as much by inflation as it is by the political climate. It varies too much above and below the inflation index based on time-period-dollars.


Doug H. said...

Don't sell the post office short on their quantum leaps in technology. A mail sorter can process 30,000 pieces of mail in a hour. That was all manual labor 20years ago. I think you would still be able to send 1st class main for 44 cents (or less)with FedEx.

Furthermore, USPS has expanded its reach beyond 1st class mail, unfairly competing with FedEx and UPS.