Postal Monopoly Essay, Research Paper
The Postal Service has been a government
agency since 1775, and since 1872 it has been illegal for anyone but government
employees to deliver a letter. Because of this and many other reasons,
the USPS is a prevalent example of a government-controlled monopoly. The
United States Postal Service is the largest postal service in the world.
With over 800,000 employees (778,171 being part-time lobbyists), it is
the US?s largest employer. In the past few years, the Postal Service?s
profits have risen and productivity has declined. This essay will discuss
why this is happening, and look deeper into the government-controlled monster
that is the Postal Service.
In the 1980?s, few scholars focused on
the Postal Service, and today there are many. This is because of all of
the controversial issues that have been discovered regarding it. The USPS
handles over 43% of the world?s mail volume, and Japan is in second with
6%. The USPS is also the largest airline shipper in the United States.
The USPS delivers about 102 billion pieces of first class mail every year,
and 20% of these letters arrive late. The average household gets 24 pieces
of first-class mail every week, so almost 5 of these every week arrive
late. In New York City in 1998, only 52% of the mail were delivered on
time. Swimming champion Mary Meager had her parents send her the 2 gold
medals that she won in the Olympics; the medals vanished when her parents
sent them via USPS Express Mail. Why are these facts so appalling? Most
of it can be blamed on the unproductive postal workers.
Postal workers, who are considered unskilled,
make over $35,000 a year, and that number keeps increasing. These are very
high wages for an unskilled worker. The workers also waste a considerable
amount of time. A survey by the Postal Inspection service discovered that
the average letter carrier wasted 1½ hours every day. Basically,
23% of all postal workers time is unproductive. A GAO study found that
the average worker takes 50 days of paid leave every year. And sometimes,
mail sent with the USPS doesn?t even get delivered.
There are numerous stories of Postal employees
stealing mail. For instance, in Chicago, 2,300 lbs. of undelivered mail
were discovered at a postal worker?s home. Once in Rhode Island, 94,000
letters were found buried at a letter carrier?s home. A Colorado carrier
was arrested after 3 tons of undelivered mail was found at his home. These
are just a few of the stories of the workers keeping mail as their own.
And some undelivered mail isn?t even because of employees stealing mail.
During the 1970?s, the CIA opened mail
routinely. The reason behind this is because of the spying going on at
this time between the U.S. and Russia, but this is still unnecessary. A
Postal Inspection Service audit found properly addressed mail dumped in
the trash at 76% of the Post Offices visited. This number is completely
unnecessary and uncalled-for. At USPS headquarters, there are 11 members
of the board and 50 economists, accountants, and lawyers on the commission.
With all of these workers, you would think that the service wouldn?t be
having problems like this. The Postmaster General is the head of the service.
The current Postmaster General is Marvin T. Runyon. Former Postmaster General
William Henderson had this to say about the Postal monopoly: ??I believe
that the Postal monopoly will not last forever.? Hopefully, he is right.
According to Henderson, one in every 200
letters is delayed or missorted. In 1970, the USPS created the Postal Reorganization
Act, trying to be redeemed. This was when the service officially
became the United States Postal Service. Before that, it was just the Post
Office. This Act had limited accomplishments. When the service was losing
vast amounts of money in 1979, there was talk of privatizing it, but nothing
pulled through. Many people hope that the service would once again consider
privatization. If the Postal Service did privatize, it would be the tenth
largest company in the U.S. The USPS attempted reorganization again in
1983, and once more in 1993. Both attempted reorganizations failed miserably.
The Zone Improvement Plan (ZIP) codes were
introduced 1990?s; this code added 4 non-required digits, for 9 in all.
Since 1958, the price of a postage stamp has increased in 1963. In the
early by 825%, and in the last 20 years, that price has increased by 18
cents. On January 10, 1999, postage rates for non-profit organizations
increased by an average of 9.6%, while business rates only increased by
1.79%. Is there some particular reasoning for the USPS to pick on non-profit
organizations? So far, there is no proof of this.
There are over 39,000 post offices in the
U.S., and about 130 million delivery points. The USPS processes about 38
million address changes annually. In some rural areas, mailboxes are placed
as far as 40 miles away from the home, for the convenience of the deliverer
and the inconvenience of the homeowner. This seems strange because UPS
and FedEx both target rural areas. In fact, 40% of UPS? delivery spots
are in rural areas. The Postal Service receives close to 50 times the amount
of mail of FedEx and UPS combined.
There are also some unfortunate laws that
the Postal Service has helped Congress pass. By law, the mailbox that you
buy and install on your property belongs to the government. The Postal
Service reserves the right to cut across people?s lawns when delivering
mail and postal vehicles are immune from parking tickets. The USPS reserves
the right to search the mail for ?contraband? ? something that looks funny
or out of place. UPS and FedEx are both strongly against these so-called
contraband searches. Federal Express and the United Parcel Service are
the two main competitors the Postal Service, but there are also 300 other
alternative delivery firms. By law, private companies must charge at least
double the amount that the USPS would charge for the same letter. Furthermore,
the USPS has its own police force that can search packages sent through
competitors if it believes that the sender is violating the service?s monopoly
laws. Of course, the USPS doesn?t do this as much anymore after a lot of
bad press and over $0.5 million in fines. Private companies, unlike the
USPS, can?t just raise their prices because of increasing costs.
How do these companies stay in business?
Here?s how the employees compare: The average UPS employee moves three-times
as fast as the average Postal deliverer, and the average FedEx employee
moves twice as fast. There is one manager per 10 workers at the USPS, compared
with one for every 15 at FedEx. Other ways to send letters without using
the Postal Service include fax and e-mail. It is estimated that 43% of
faxes represent a diversion of communications of the mail, and in the 1990?s,
e-mail has also taken a chunk out of the Postal Service.
The Postal Service is entirely exempt from
complete compliance with the Occupational Safety & Health Administration.
Basically, the OSHA may not fine the Postal Service for unsafe working
conditions. This should not be, because their employees do a lot
of stressful, repetitive tasks. In fact, in 1994, Postal Employees counted
for 29% of federal agencies working compensation claims. Also that year,
the service paid over $521 million in workers compensation claims, death
benefits, medical expenses, and other expenses.
The Postal Service tried changing its public
image in 1997, spending millions of dollars on ?What?s Your Priority??
ads for Priority Mail. In one month, they spent $275,000 on ads in the
New York Times, telling the public how hard they will ?deliver for you?.
The ads seemed to pay off though; they have generated more than a $500
million increase for Priority Mail. But unlike its competitors, Priority
Mail 2-day delivery is not in any way guaranteed.
In the Postal Services latest cry for attention,
they have introduced a new ?Postal Notes? advertising campaign. These ads
tell little known facts about the service. For example, one ad says that
the Postal Service uses donkeys to deliver mail to the bottom of the Grand
Canyon, bush pilots to deliver to the Arctic Circle, and mail-boats for
along the bayous of Louisiana ? all for the price of a 33 cent stamp. These
ads have cost about $12 million.
The USPS also spent about $7 million to
change their long outdated logo to the ?Sonic Eagle? in 1997, and almost
$4 billion to put together over 5,000 pieces of automation equipment. The
service spent $232.4 million of its $143 million budget on advertising,
nearly $90 million over budget. Looks like the USPS thinks the only way
to get more business is through numerous advertisements. In 1995,
the USPS owed the U.S. Treasury about $9 billion for borrowed money. It
is rare for the Postal Service to have more profit then debt. Surely not
because they don?t make enough, but because they borrow money in immoderation.
In fact, when the service turned a profit, like in 1995, it was only the
eighth time during 24 years. Currently, the United States Postal Service
owes the U.S. Treasury somewhere around $7.3 billion, not much difference
In one USPS ad, it says the following:
?If it surprises you that the U.S. Postal Service is not funded by tax
dollars, join the crowd.? This is terribly misleading though; contrary
to popular belief, the government does fund the USPS. In fact, in 1996,
the government gave the USPS almost $770.9 million. What do they do with
this money? They spend most of it, 84%, on its employees. The USPS? net
income has gone down considerably every year. It has gone from $1.8 billion
in ?95, to $1.8 billion in ?96, to $1.2 billion in ?97.
Many people are urging the USPS to consider
privatization. Because of the vast amounts of money that it is losing,
it may do just that. But until then, if the service continues at this pace,
we can expect to see higher prices, longer zip codes, more unproductive
workers, and the USPS even farther in debt.