From Townhall Magazine's EXCLUSIVE May feature, "Is the U.S. Postal Service Worth Saving?" by Kevin Glass:
Technology’s rapid advance over the past few decades has brought an era of unprecedented communication among Americans. With video chat, people separated by thousands of miles can interact as if they’re in the same room. Small business owners can pay bills with the click of a mouse. The original online communications technology—e-mail—has become so much more. And there’s a government agency that is not happy about this
The U.S Postal Service is in crisis. Mail volume peaked in 2006, and they have been losing business—and more importantly, money—ever since. As an arm of the federal government, taxpayers should be worried about the financial health of an agency that is supposed to be, in theory, self-financing. Several congressional Democrats and the U.S. Postal Service workers’ unions are waging a losing war against technology to try to survive in an e-economy without cutting jobs or service.
A trio of government unions have formed together to push back against the tide of technological progress. The American Postal Workers Union, National Association of Letter Carriers and the National Postal Mail Handlers Union are all involved in the fight to drain more taxpayer money from the government and funnel it toward federal workers. Unless substantial action is taken, they’re going to succeed, and the once-great post office will become nothing more than a union-supported government agency that bleeds red ink year after year.
Post office reform is possible. There are people fighting in Congress to turn the tide and streamline the delivery agency into a more efficient service for the benefit of the whole country, but it will take effort and the political will to overcome Democrats and government unions committed to bleeding taxpayers dry for the sake of federal workers.
What Went Wrong?
Conservatives often argue that an inefficient federal program isn’t a legitimate function of the government. Not so with the Postal Service. Founded in 1775 by the Continental Congress, mail delivery was written into Article I of the Constitution. Through two centuries of legislation and regulation, the Postal Service has a government-forced monopoly on many different types of mail delivery and is designed to subsidize rural and long-distance delivery—sending a first-class letter is the same price no matter if it’s going across the street or across the country.
In 1970, Congress passed a package of reforms that turned the post office from the United States Post Office Department, a cabinet-level bureaucracy, into the United States Postal Service, a government-owned corporate-like agency. Before, the Post Office Department wasn’t charged with balancing its budget and self-funding. However, with the transition into an independent agency that had a legal monopoly on mail delivery, the new Postal Service was supposed to be able to fund itself through prices charged for mail delivery.
The turn of the century is where the Postal Service’s real trouble started, as its business-like organization proved resistant to change in the face of an evolving marketplace.
As electronic communications have advanced, the post office has been challenged in different ways. Telegrams provided for near-instantaneous transmission of messages, and the telephone allowed people to actually talk to each other over great distances. However, no technology gave postal mail such an existential crisis as the Internet. For all the previous technology had done for communications, much business still needed to be conducted with paper communications—until the Internet. The online age brought the ability to transit massive amounts of data across the world and the seeds of the destruction of mail delivery.
Mail delivery peaked in 2006 after having been relatively stagnant for the previous decade. It’s now been on a downward decline, spelling massive financial loss for the Postal Service and looking unlikely to recover. The Postal Service announced losses of $8.5 billion in 2010, $5.5 billion in 2011 and $3 billion in the first quarter of 2012. What’s more, due to a 2006 law that charged the agency to be more responsible with its accounting practices, its budget is going to look worse and worse.
Read more analysis from Kevin Glass in the May isssue of Townhall Magazine.