Although President Trump claims Amazon is taking advantage of the post office, the big problem is closer to the White House.
One of the first people I met after moving to my Belltown condo 10 years ago was Rhonda Jo Jeffries, who styled herself “your mail lady.”
She was the neighborhood letter carrier for the U.S. Postal Service, and seemingly everyone knew her and appreciated her easy smile, mischievous wit and highly competent handling of the mail. My mail lady was the antithesis of the Seattle Freeze.
She retired a few years ago and is still missed. When I see a story about a postal worker hoarding thousands of pieces of mail or worse, I think of her. She represented the best — and the majority — of those who follow the creed that “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds.”
The Postal Service is undeniably in trouble. Contrary to President Trump’s tweets, however, the culprit is not Amazon. Instead, a complex storm of “disruption” and other woes bedevil the appointed rounds.
This is a story of a business not allowed to run itself like one. But it’s also one of the most prominent examples of the degradation of the commons. Should we expect the common good to always be served by the for-profit system?
Knitting together the country was important even before independence: The First Continental Congress created the Post Office in 1775, naming Benjamin Franklin postmaster general. This was not only important for commerce, but for spreading ideas and news. The Constitution explicitly gave Congress authority “to establish post offices and post roads.”
The Post Office Department was no more expected to turn a profit than was the Army or Navy. It operated in the national interest and was expected to deliver everywhere for the price of postage.
This changed in 1970 when a Democratic Congress passed, and Republican President Richard Nixon signed, a comprehensive reorganization. The Post Office became the U.S. Postal Service, a government-owned corporation. It was supposed to operate like a business with no taxpayer support.
Unfortunately, because of congressional interference, other meddling and bad labor relations with a strong union, the results have been disappointing. Postal Service executives have been unable to make nimble and effective responses, whether in stamp pricing or the size of the labor force.
And the 1970 law itself continued to tip its hat to the commons. The first sentences: “The United States Postal Service shall be operated as a basic and fundamental service provided to the people by the Government of the United States.” And: “The Postal Service shall have as its basic function the obligation to provide postal services to bind the Nation together through the personal, educational, literary, and business correspondence of the people.”
“To the people.” “Obligation” “Bind the nation together.” Contrast those words and phrases to the sickness of today’s America and its federal leaders.
This demand also doesn’t apply to FedEx or United Parcel Service.
With the rise of the internet and digital communication, the big money maker of first-class mail, the Postal Service’s monopoly, has fallen dramatically in volume since 2001.
But the biggest financial problem is hidden: In 2006, Congress ordered the Postal Service to pre-fund 75 years of retiree health and pension benefits. No other federal agency faces this mandate. It also doesn’t happen in the private sector. The bipartisan legislation that led to this extraordinary measure was intended to provide the post office with more flexibility, such as more competitive pricing for shipping. But the George W. Bush White House threatened a veto if pre-funding wasn’t added.
Admittedly, this is a few days of military action in a federal budget of more than $4 trillion. But the biggest cause of the shortfall is contributing to the pre-funding requirement.
One savior has been an increase in parcels because of the rise of e-commerce. Amazon is USPS’ largest single shipper.
Neither the Postal Service nor Amazon release the details of their pricing. The Postal Service says it makes money and the e-commerce business is essential to supporting its universal network.
If anything, the constructive response to the Postal Service’s problems is to bring in more e-commerce business, along with reforming the enormous, economically illogical prefunding mandate.
The president’s eggers-on within the administration may be riffing off a Citigroup research report that questioned whether the Postal Service was charging enough. But the report didn’t account for Amazon already having its own massive infrastructure that sorts packages by ZIP code and only using the Postal Service for the “last mile” of delivery.
Of course, Wall Street would love to see the Postal Service totally privatized. So, no doubt, would Trump’s cronies, who will generate or spin the report the president has ordered on the condition of the organization. A Wall Street that thrives on “rip, strip and flip,” shedding as many jobs as possible in the process, is not to be trusted with the appointed rounds. Imagine the equivalent of the private-prison racket handed one of the oldest and still most important trusts in the republic.
Germany privatized its post office between 1995 and 2000, with Deutsche Post also acquiring DHL Express and Seattle-based Airborne Express. This was part of a general liberalization of postal services in the EU. The results across Europe were mixed, with more competition but higher prices, worse service and eliminating many jobs or replacing full-time work with “gig” employees.
Japan Post was also gradually privatized, but it also comprises large banking and insurance units. The government still holds a major stake. But the performance of the enterprise’s stock has been lackluster.
None of these countries offer perfect best practices for the United States. They all have universal health care and better social-safety nets to at least partially offset job losses and downward economic mobility.
Most Read Business Stories
- Airbus racks up more orders over stricken Boeing at Paris Air Show
- Is an iPad enough to train Boeing 737 MAX pilots? Famed pilot Sullenberger says he has a better idea
- British Airways parent company delivers a massive vote of confidence in the Boeing 737 MAX
- Dish is near a $6 billion deal for T-Mobile, Sprint assets
- Pilots criticize Boeing for mistakes on its grounded jet VIEW
Libertarian think tanks have enthusiastically put forward privatization ideas. In 2015, Elaine Kamarck of the centrist Brookings Institution proposed splitting the Postal Service in half. One part would compete in the marketplace to handle profitable parcels. The other would be a public entity to serve the “universal mandate,” delivering mail everywhere, with adjustments for the digital age.
For constituencies from rural members of Congress to postal workers, “adjustments” mean cutbacks. And the experience of Europe backs that up.
On the other hand, Sen. Kirsten Gillibrand, D-N.Y., is proposing legislation that would allow the Postal Service to provide financial services to low-income people. The measure would leverage the reach of the post office and provide a better option than predatory payday lenders. It stands little chance with Republicans in control of Congress and the White House. But that could change.
Which brings us back to the question of whether the common good can always be served by the for-profit system? The answer is obviously “no” when it comes to, say, the armed forces, Social Security — or a host of botched privatization efforts in the United States.
At a time of rising inequality and the loss of middle-wage jobs, a hasty dismantling of the Postal Service would only accelerate these destructive trends. And it would make it impossible to experience the duty-bound commitment and warmth of someone like Rhonda Jo Jeffries.