Kaszycki: The U.S. Postal Serivce, an expensive nostalgia

By Steve Kaszycki

Did you ever think you’d miss snail mail? Well, you just might, for a day.

According to CNNMoney, the Post Office has announced that it needs to make significant changes to avoid losing an estimated $238 billion over the next 10 years.

The moves are what one would expect to hear: Eliminate Saturday service, while eliminating the prepaid retirement health benefits plan. The estimated savings from these two moves is $90 billion.

Great, so it would only be $148 billion—and that’s if the retirement health savings account adjustment goes through. That is much better, but maybe other options need to be considered. In truth, the Post Office needs to do something that it is likely unwilling to consider: privatize.

By privatize, I mean, in the long term, die. The Post Office is a relic that has been propped up by the government. For years, it has been suffering losses, the latest being $3.8 billion, following losses of $2.8 billion and $5 billion in previous years, according to CNN. I doubt that the Post Office can turn the circumstances around, even if it were tasked with having to survive on its own, without the comfy, inflated cushion of big government backing it.

The payroll for salaries and wages in the Post Office every two weeks amounts to $2.1 billion, according to The Washington Post. Translated to quarterly data, these figures exceed the labor expense of FedEx. One of the major reasons behind this reality is that government doesn’t have to be cost-effective — when government spends more than it takes in, it simply taxes more or borrows more to cover the shortage.

Keeping the Post Office makes about as much sense as trying to restart the Pony Express. They’re both outdated. Video didn’t kill the radio star, but the Internet killed the Post Office. It wasn’t a shotgun blast, more like a slow bleed — as more and more people gained Internet access and online banking and shopping technology improved at exponential levels, the sectors that traditionally drove the Post Office’s business model simply evaporated.

Today, companies are increasingly using direct deposit, bypassing the old convention of mailing out the check. Personal communication is done through e-mail, Facebook and MySpace.

And even more people are becoming computer literate. We assume that people are capable of using a telephone, so why not a computer? For those elderly people who lack the knowledge of home computing, or for individuals with special needs, a tiny fraction of the budget of the Post Office could be used to establish support programs ensuring that they are not left behind by the technological winds.

But arguing that the jobs of a small subgroup of Americans justify maintaining an unprofitable, inefficient and antiquated enterprise is unwise. It is the equivalent of the government subsidizing the horse-drawn carriage industry for those who were unable to operate motor vehicles.

Scaling back delivery, increasing the cost of stamps, etc., will not fix what is irreparably broken. In fact, these moves may drive more people to the private sector competition and to a greater reliance on Internet technology.

Moreover, it will impair the business model of Netflix — which now delivers on a six-day-per-week schedule in the Pittsburgh area and would face increased costs from the price hikes, likely accelerating the company’s shift toward an on-demand, streaming delivery system.

An unfortunate side-effect of privatizing and likely folding up is that some hard-working people will lose their jobs. This shouldn’t be taken lightly — losing what seemed like a viable career option is a traumatic event, and those who would face this would have some difficulties.

But when we push toward a more effective, more modernized economy, everyone wins in the end.

The typewriter repairman lost his career — for the moment — when the home computer became a staple of households. Before that, carriage makers, sellers and repairmen lost out to Henry Ford, and so on.

Hard-working people are continually faced with the necessity of finding new lines of employment in the wake of technological innovation, and to attempt to subvert this process would be to cling to outdated systems.

We can’t justify segments of government merely because of cultural identity — the mailman has a well-developed cultural image in the United States, clad in blue and wary of perpetually unfriendly dogs. Sooner or later, however, that will have to become an image of the past. So let’s put that image into history sooner and reduce our losses while we can.

Nevermind snail mail. E-mail Steve at [email protected]