656,000.  Would you believe that is how many pieces of mail are delivered every day?  I’d hope not because the actual number is 660 million.  656,000 are the number of employees at the United States Postal Service.  That is second only to Walmart in civilian employees.  Here are a couple of other statistics, 263,575 and 260,000.  One is the number of vehicles owned the other is the Postmaster General’s (like CEO) salary (not including bonuses and perks), doesn’t really matter which is which huh?

Before you get up in arms about government pay or waste or whatever kind of stuff The Weakonomist usually does, you should know that the USPS has not received a dime of our tax money since the 80s.  They live in limbo between non-profit corporation and government entity.  They are granted certain “perks” the private companies do not have.  First and foremost, they don’t pay income taxes.  Second, they can claim property under eminent domain.  They can also borrow money at cheaper rates than the rest of us.  Naturally it’s implied that if they were in serious financial trouble the government would give them money too.

But the USPS has to adhere to some rules as well.  It was George Washington’s dream that everyone in his country have access to the free flow of information.  Back in the day mail was the way to do it, today the internet serves this need.  So no matter how far and wide you need to send a letter, it’s the same price.  They must also maintain a post office within a reasonable distance for most people (though the government does toss in a small subsidy for this, just don’t tell anyone).  In exchange the government grants them a monopoly on all letters sent in the United States and exclusive access to our mailboxes.  Sweet deal.

What does all this add up to?  A crappy, half-subsidized, grumpily employed bloated organization with no incentive to operate in any other way.  That’s a bit crass, but no less accurate.  The postal service has been on the decline with the invention of email and the internet, not to mention wildly unpredictable fuel prices (fuel budget is something like $2-$3 billion).  With a government monopoly and no shareholders to report to, the USPS has no incentive to improve efficiency or control costs because it really doesn’t have to compete.  Sure they compete with UPS and FedEX, but only superficially.  If the USPS were cut loose and put on their own, they’d be pushed out of the industry in less than a decade.

Between the intenet, and private shipping firms like FedEX and UPS, the USPS has a rough future.  Stamp prices are increasing so fast many of us don’t have enough time to run through a book before they go up again, prompting them to offer forever stamps.  By the way, if you’ve considered forever stamps as an investment, this writer and plenty of others have done the math, it doesn’t work out.

The USPS is one of the few government agencies explicitly described in the Constitution.  So despite my sometimes Libertarian viewpoints of government, I can’t hate on them too much; unless there was some way to amend the Constitution to update it to modern times.

But that isn’t to say the USPS should be cut loose.  Perhaps our mail should be controlled heavily by the government in some fashion.  It seems to work alright in other areas of government granted monopolies, like utilities.  Sure consumers have complaints there, but it’s done more good than harm.  Should the USPS remain in this government/private sector limbo?  Only time will tell, and at the rate things are going for them, time is almost up.

By The Weakonomist

The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice.

categories: business, college of weakonomics, government