January 2014's price hike in first class stamps prompted outcry and dire predictions about the future of the Post Office. While the hike was a very public sign of fiscal problems some communities had already felt the impact through reduced hours or the closing of their local Post Office. Over 60 buildings have been sold so far with nearly 4,000 on a list for sale analysis. In fact purchasing Post Office buildings as investment properties that are then leased back to the United States Postal Service (USPS) has become a hot trend. Some, like Donald Trump, don't buy the buildings. They lease and develop them. Trump will renovate the historical D.C. building and use it's desirable location to create a 270 room luxury hotel. Why are we closing and selling post offices?
The Post Office's Role in Society
Selling Post Offices weakens the basic infrastructure in our country. The Post Office is fundamental to employment, the development of America and the creation of large businesses. Long before the telephone and internet the United States Post Office created America's first network of communications and it's always been the system sure to connect us with family and friends. The vast postal network is credited with driving western expansion and rail development in America. It developed the first national telegraph systems which were later sold to private business. Profitable mail order companies were enabled by the network and, over time, other ventures, such as Pitney Bowes grew profitable providing service to the United States Post Office. Today, the Post Office continues to seed business generation and, according to Wikipedia, it's the nation's 3rd largest employer behind the Federal Government itself and Walmart. At 49 cents a stamp its hard to imagine a better return on investment.
The Post Office's civic importance extends beyond concrete contributions to society. Ideological guidance is a main reason for its relevance today. The Post Office's mission, authorized by the Constitution in the late 1700's, is to provide communications service to all Americans at a uniform price regardless of geographical location. In other words, unlike other products such as gasoline, a first class stamp costs the same price in remote Alaska as it does in New York City...49 cents. That's because it's a government service meant to bond the nation and ensure equitable access to fundamental communications. Today it stands in bright contrast to privately owned broadband and cell phone networks. In addition to being symbolic of social equity the post office and it's early policymakers established the concept of communications privacy which is so hotly debated today. The Post Office's statutes provided both the model and motivation for including information privacy in our 4th amendment rights according to an article in the Stanford Law Review called "Wiretapping Before The Wires: The Post Office and the Birth of Communications Privacy."
The Post Office and its Monopoly History--Why it's Appealing to Buyers
A service monopoly, such as the Post Office enjoyed, whether in the hands of the government or business can be an intoxicating form of commerce. Consequently, monopolies such as the Post Office are both fought against and desired. When the Post Office attempted to implement high and uneven pricing, in the early 1800's, Lysander Spooner fought back with his own company venture, The American Letter Mail Company. His private competition caused the government to reinstate inexpensive first class stamps at the now unbelievable rate of 3 cents each! Unlike Spooner, however, Henry Wells, founder of Wells Fargo, eyed the commercial value of the Post Office's monopoly first competing and then contracting with the US Mail and eventually garnering his company 1 million dollars to deliver mail in 1861. Market competition is healthy for any venture however and the "monopoly" of the United States Post Office has historically had adequate market pressure to ensure that it followed the mission of equitable public service. For 200 years America enjoyed the advantages of its accessible and inexpensive postal service. In 1970 things changed.
The United States Post Office Department was abolished by a 1970 law signed by Richard Nixon. The Post Office we interact with today was created by that law just over 40 years ago. In other words this is not Spooner's, Wells', or your father's post office. This reorganized post office was conceived by AT & T Chairman Frederick Kappel who testified in Congress, "If I could, I'd make it a private industry enterprise and I would create a private corporation to run the postal service and the country would be better off financially." The law reduced Congressional control and established what Rick Geddes characterized in a 2003 article "Who's Looking Out for Postal Customers", as a "...Postal Service [that] now seems accountable to no one, neither citizen tax payers nor shareholders." It set in motion a domino game of corporate outsourcing that peaked in 1997 when the $1.7 billion Priority mail business was awarded to CNF Transportation Inc's Emery Worldwide Airlines unit resulting in a net loss to the Post Office of thousands of jobs and millions of dollars. AT& T, by the way, drew $35 million dollars revenue from the reorganized United States Post Office for services rendered that were formerly performed in house. When you lick your 49 cent stamp please think about that.
The Root of Fiscal Problems
Many knowledgeable writers have concluded that the Post Office's problems today are the result of increasingly digital communication but 2 other sources form a stronger link to fiscal problems. First of all, Between 1988 and today the Post Office moved many of its most profitable operations into the hands of for profit contracting businesses. The massive transformation that shed and shook employees coincided with the phenomenon of "going postal" which took the lives of more than 40 people in incidences of suicide and workplace violence. By 2010 hundreds of thousands of postal jobs were lost and $12 billion dollars flowed to private enterprise ---often without a competitive bidding process. There were 150 successful businesses on that list. Names you'd recognize. A small prominent group : Fed Ex, Northrup Grumman, Siemens, Hewlett Packard, Accenture, and IBM, earned revenue topping $100 million a year. Others, such as Continental, United, Delta, Alaska and American Airlines, Verizon, Lockheed Martin, Office Max, NCR, AT & T, Pitney Bowes, and Deloitte received between $90 and $30 million dollars annually. A 2003 trade article, "Playing post office and looking for love" reflects the irreverent tone of business suitors. The article profiles Convergys, a self described relationship management company that signed a $700 million dollar six year deal to takeover operation of the Post Office's 3 call centers. Reorganization and the privatization it facilitated were meant to streamline costs, improve service, and hold down rising prices but the trend line, below, shows the staggering rise in costs to consumers that have occurred since that time.
Graph from University of Georgia mathematics class courtesy of Jim Wilson.
The second root of fiscal problems lays in The Postal Accountability and Enhancement Act (PAEA), signed by George Bush in 2006. PAEA had as its goal, according to Democratic Representative, Henry Waxman, "allowing the Post Office to fulfill its universal service mission at a reasonable cost." But it took an odd road to ensure service and cost control by requiring the Post Office to pre-fund 75 years of retirement payments over a stretch of just 10 years. Scratching your head? Me too. There's no government or private business that guarantees retirement that far in the future or bears the cost in just ten years. Meeting the commitment demands a payment of $5.5 billion dollars annually to the United States Treasury and, as recently as 2011, forced the Post Office to the edge of bankruptcy!
For many years the Post Office's gaudy revenues from monopoly business have attracted entrepreneurs. To attain that revenue and lure the Post Office away from its sole goal as a public good required a strong argument like Kappel offered in 1970....private business can produce better fiscal results which, in the end, benefit America. That argument is strengthened when the Post Office looks like an extraordinary loss. In fact, Representative Waxman offered a more true articulation of the goals of PAEA when he said, "...it includes provisions to level the playing field for the Post Office and its competitors." It did that by saddling the mighty Post with unreasonable fiscal demands and tying it's hands in fielding new services to battle competition and counter the effect of digital communications. Sensing new profitable opportunity, Pitney Bowes' 9 million dollar CEO, a long time Post Office contractor, is funding Daniel Issa's legislation that would completely collapse the weakened Post Office and convert it into an entirely for profit venture.
How Does Post Office Divestiture Impact Society?
As USPS' fiscal crisis deepens the public feels the impact through rising prices and, perhaps, the shuttering of a local Post Office. Many old Post Office buildings are historic landmarks holding art treasures with enormous value . Their closures cause inconvenience, loss of public treasure, and frustration. Closed Post Office's create local activism and erode public trust. As a Los Angeles woman writes, the closure of her local Post Office was disillusioning and fed into larger concerns about the privatization of the public commons. Closing Post Offices begs important questions: Are there any limits on what can be bought and sold in America? Are we losing more public space than we're gaining? Should government be run like business? How much publicly owned property should be retained by and reserved for public use?
The Post Office is the core of many city centers, the most trusted government agency (though it's technically an independent quasi corporation), and a symbol of privacy, universal access, and equity. The fight to save our post offices is a fight worth having. Saving the Post Office isn't only about preserving the historical past its a struggle to determine our future. It's the reflex to protect thousands of stable jobs and ensure that families in remote Arkansas have the same access to mail order medicines and letters as families living in downtown Chicago. It's the civility in America that prompts us to provide a public communications network so that every single citizen has a way to connect with family or conduct business at a reasonable price. Lastly, its the necessity of preserving the public commons and holding our corporations and representatives responsible for protecting the social fabric that enables their success. I'm all in with saving our Post Office and bringing its profits back to the people. Are you?!
Update March 13 2015 Jim Hightower has a long informative article on why post offices are being forced into closure and the consequences. He features the plight of small the Valentine Texas office.
Update February 2015, Great Article in the Washington Post about a broad coalition of advocacy, lobby and education groups that have aligned to saw the United States Postal Service.
Update April 2016 Why is the post office still relevant? On line package delivery is spiking and offsetting any decline in first class mail. Moreover, some say that young people only use their digital devices to communicate but a new Gallup poll said...."81 percent of 18-29 year olds gave the USPS “excellent or good” marks."
update July 2020 The Trump administration goes after the post office. What does it mean for your mail? what does it mean for the future of communication?
Update August 2020 Trump appointed Postmaster mulls downgrading election mail from first class to bulk which would slow ballots.
Update August 2020 Comedians take on the dismantling of the postoffice just days before the nation votes via mail.
Update Oct 2020 Onerous mandates and no govt assistance for this govt agency hamper the post office's viability which private competitors are quick to point to as failure.
