21st CENTURY POSTAL SERVICE
21st CENTURY POSTAL SERVICE
Analysis and Commentary:
Postalworkersonline.com seeks to facilitate a healthy and constructive online discussion about the future of the U.S. Postal Service and the critical challenges it faces in the 21st century.
As part of this effort, Postalworkersonline.com will be hosting a series of guest editorials written by people prominently involved in discussions about the Postal Service's future. Guests will be invited from across the postal spectrum. Each will have their own unique perspective. Editorials do not necessarily reflect postalworkersonline.com views. We ask that you respectfully consider their comments and we invite you to reply with your own thoughts and comments. Replies will be posted on our Reader Feedback page.
We are pleased to have Edward L. Hudgins of the Cato Institute and author of Mail @ the Millennium, for our first guest editorial. His biography appears at the end of the column.
Guest Editorial
reply to this editorial | view reader feedback
Why Postal Workers Should Favor Privatization
Edward L. Hudgins
The conventional wisdom holds that postal workers will be the last to welcome privatization of the U.S. Postal Service, that they will fight vigorously to preserve that government monopoly and with it, they believe, their jobs. But need this be the case? Or should postal workers see privatization as an opportunity?
It is first necessary to take stock of the USPS’s current situation. While the Postal Service retains a monopoly on the delivery of first- and third-class mail and the use of mailboxes, it does face stiff competition on many fronts. Urgent communications can be sent via a local messenger on a bike or a Federal Express jet. Faxes, e-mails, and the Internet have reduced the need to put a stamp on an envelope to transfer documents from here to there.
A General Accounting Office study has confirmed the fears of many postal officials. Over the next decade annual USPS revenues, currently at nearly $65 billion, will decline by some $15 billion as more people pay more bills electronically. That will mean less "The check is in the mail" excuses as well as less income for the USPS.
The Postal Service wants to offer new business and ecommerce services to obtain desperately needed revenue. It wants to offer email and online security services and to coordinate business orders, shipping, billing and inventory. It has an arrangement with Mail Boxes, Etc. to offer products at that company's outlets. And in a move that would have been unthinkable even a few years ago, it has entered an alliance with tradition rival Federal Express. FedEx now will be carrying express mail. It is understandable why USPS wants this arrangement. Private carriers now handle some 90 percent of overnight deliveries. In return FedEx will be allowed to put its drop boxes in post offices.
These are the sorts of plans one would expect from any good entrepreneur. However, the USPS's expansion into new markets and its public-private partnerships open it to changes of unfair advantages. After all, the USPS pays no taxes, it can borrow from the Treasury, and if its new business ventures fail, it could make up losses with higher stamp prices. In addition to bring exempt from most government regulations under which private businesses must operate, it also is exempt from many of the constraints to which other government agencies are subject, even though it is government entity. Perhaps worst of all, the Postal Service has regulatory authority that it can and does use against competitors.
Clashes with private companies offering innovative ecommerce services seem inevitable. The Postal Service will be between a rock and a hard place. So what’s the solution?
Perhaps in Germany we see the wave of the future. Deutsche Post, the largest mail carrier in Europe, has been reorganized as a joint-stock company under private management. In November 2000, it made an initial public offering of stock and in 2003, its monopoly will be repealed.
What will happen to American postal workers if such an approach is tried here? Deutsche Post did reduce its labor force over a decade without forced lay-offs. But more interesting is one of Deutsche Post's motivations. That company is offering a wider variety of communications, information and delivery services, and is becoming a continental and global service provider.
A privatized U.S. Postal Service, even subject to the same tax and regulatory regime of the private sector, would certainly be able to integrate much more efficiently into the new economy. In addition to ecommerce, who knows what other services it might offer? Maybe during the day USPS couriers on bikes will offer one-hour delivery. Perhaps during the evening those postal trucks that usually are idle could be used to deliver merchandise from local stores to customers' homes.
A lesson might be learned from the information revolution. In 1996 ATT announced it might need to lay off 40,000 workers (in the end it didn't). But in the decade prior to the announcement the MCI workforce had grown from 12,000 to 48,000, jobs at Sprint rose from 27,000 to 52,000, and the number of cable operators and programmers in the economy grew from 24,000 to 112,000. In other words, in the telecommunications industry as a whole, far more net jobs were created than ATT planned to eliminate.
The Internet and ecommerce is generating more postal volume, not less. It's just a different mix: more Amazon.com and ebay packages and fewer electric bills. A private U.S. Postal Service could act as an entrepreneur facilitating economic growth rather than as a government monopoly seeking to cripple competitors and acting as a ball and chain on the leg of the economy.
Edward L. Hudgins
Cato's director of regulatory studies Edward L. Hudgins is an expert on the regulation of agriculture, pharmaceuticals, labor, space, and transportation and on state and international regulatory comparisons. He is the former editor of Cato's Regulation magazine. He served as a senior economist for the Joint Economic Committee of the U.S. Congress and was both deputy director for economic policy studies and director of the Center for International Economic Growth at the Heritage Foundation. He has testified on many occasions before Congress. Hudgins is widely published and has appeared on numerous television shows, including public television's NewsHour and Dateline NBC. He has a bachelor's degree from the University of Maryland, a master's from American University, and a doctorate from Catholic University. He has taught at universities in this country and in Germany.
More postalworkersonline!
Connect: bulletin board | egroup | interact | print this flyer
Crafts: clerks | letter carriers | letter carrier pay | more crafts coming soon!
Information: answers | career advancement | employment info | news
Links: clubs and chat | postal links
Mutual Transfers: about | carrier postings | clerk postings | other postings
Perspective: analysis/commentary | letters to the editor | sitreps
Shopping: audiobooks | bookstore | study guides | classifieds | shopping
Tools: calendar | clip art | ELM 15.1 | PS 991 | time conversion
FYI: about us | advertise with us | contact us | terms of use
Copyright © 2001 Postalworkersonline.com. All rights reserved.
Advertising
Advertise in our classified ads, or contact us for info about links and banner ads. With almost 900,000 postal employees you can't go wrong by advertising here!
Recommended
Is There a Place for the Postal Service in The 21st Century?
The rise of the Internet and the flourishing of private package-delivery services have brought the U.S. Postal Service to a crossroads. "Mail @ the Millennium" a new Cato Institute book presses the case for market-based reform of the Postal Service.
Mail @ the Millennium Book Forum: Will the Postal Service Go Private? Moderated by Edward L. Hudgins
Watch the event in RealVideo or read the event transcript (pdf).
The Envelope Manufacturers Association (EMA Foundation For Paper-Based Communications) is rightfully concerned about the Postal Service in the 21st century. You can find a number of postal-related topics at the EMA Web site, including:
What Constitutes Real Postal Reform, by Murray Comarow – former executive director of a presidential commission to reform the Post Office Department.
E-Mail Study: Will e-mail end the need for the Postal Service?
United States House of Representatives Subcommittee on the Postal Service
