Why is the US Postal Service going bankrupt?

On a wintry Saturday morning, while I wait to have my breakfast, what else should be on my mind but the future of Saturday mail deliveries in the US? The economist part of my brain understands well enough that the US$3 billion dollar cash hole the USPS is facing needs to be filled. The USPS has announced unprecedented cuts to first-class mail services and plans to eliminate more than 250 processing centers and lay off nearly 30,000 workers, from from next Spring. The reality is that, after seeing levels of 98 billion in 2006, first-class mail volume is now at less than 78 billion, and is projected to drop by roughly half by 2020. The agency already has announced a 1-cent increase in first-class mail to 45 cents beginning January 22, 2012.

We are all to blame, with the general decline in letter writing and sending things by mail, plus our increased use of the electronic messaging through Internet, and the use of rival services such as UPS and FedEx. When my mail service seemed to stop a few weeks ago, I was puzzled, but did not really miss getting much that was vital–if you can exclude magazines I like to read, catalogs my wife and daughter love to browse, advertising (‘junk?) mail that makes up over half of what I receive every day. I bought a sheet of 40 stamps last year and only just used up the last one. Expectations have changed–see the Washington Post series of images of postal services over the years.

I went to send something by mail yesterday and have a different view of the reasons. While I waited to have my package sent by Priority Mail, I stood behind a man ordering 600 Christmas stamps. “What designs would you like?” the postal worker asked him. He turned toward me, but looked over my shoulder before shouting “Honey, what style of stamps do we want? They have regular  Christmas, ‘forever’, Hanukkah, Kwanza and some others.” His wife came to join him, clutching a few padded envelopes designed with Christmas motifs. She hummed and haa-ed and eventually decided on how to make up the 600 stamps needed. Meanwhile, I and a growing line of other customers thought of and did other things to wile away the minutes–nearly 10–it took to get this simple sale done. Was I frustrated or angered by the high-context activity that was going on? Not really. I became a little agitated when I was about to hand my package to the teller and she called out to someone “Young man! You don’t need to go back in line. You were up here already. You too, sir. Just step up.” I was now moved from next in line to third. I imagined another series of ‘What stamps would you like?’ But got a different series, twice over. “Do you want delivery confirmation or insurance with the packages? Do you need stamps?” I admired the up-selling, but looked at my watch–15 minutes and counting had passed and my simple package lay unmoved. Eventually, my turn came and I got my package franked and handed over in the quickest possible time, about 2 minutes. I headed out and looked at the glowering faces behind me. I was among the few who were not frustrated and angered by the prospect of an hour in line to send a package or a letter or buy some mail necessities.

The post office counter as business center is like an old-fashioned or village family grocer store compared to a modern supermarket. It’s charming, but it does not rake in the money, and is likely to not encourage regular visits unless in emergencies.

I know the USPS is trying to save money. A few weekends ago, I saw a lady delivering letters dressed in a sweater and pink sweat pants. I asked her if Saturdays were dress down days. No, she told me: new workers do not get uniforms for 90 days. Odd, I thought. You’re trusting someone to deliver items for 3 months but wont kit them out in the required wear during that time? Hmmm.

I don’t think that I will miss seeing mail on a Saturday–there’s nothing that urgent that I expect any day. I like the fact that post offices are easy to locate and use, if a bit slow. I know that by comparison to private shippers, USPS is cheaper by a long way. It may be because of people like me that the postal service declines further, but it’s also people like me who use it–albeit in a limited fashion–that can give it life. But, it has to breathe some life into itself, too.

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About The Grasshopper

Professional international economist, recently retired from an international organization. I use blogging as a way of organizing my ideas and thoughts about a range of topics. I was born in Jamaica, and spent many years being educated, living, and working in the UK. I lived in the USA for a few decades, and worked and travelled abroad extensively. My views have a wide international perspective. Father of girls. Also, married to an economist.
This entry was posted in Bureaucracy, Digital age, Economics, Human relationships, Internet, Life styles, Public policy, Service economy, Technology, Urban life, US economy and tagged , , . Bookmark the permalink.

One Response to Why is the US Postal Service going bankrupt?

  1. Paul Betzler says:

    The times have definitely changed and the world today is into technology and extremely impatient. This is one reason why the US Postal Service is going bankrupt. People pay their bills online and send emails instead of mail letters. If people want to save the post office, they actually need to use the service by buying stamps and writing letters again.

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