Sunday, January 30, 2011

Closing Post Offices

Last week the Wallstreet Journal ran a story on the US Postal Service which is proposing closing offices and making and other cuts due to continued unprofitability. The story says there are roughly 36,000 post offices in this country and as many as half are under review for possible closings or cuts. Current law only allows the USPS to close offices that are damaged, or whose leases are up without specific approval.
The USPS has been operating at a loss for years. While FedEx and UPS have experienced tremendous growth and have increased the number and quality of services, the post office has continued to stagnate. Last year the idea of cutting mail service to 5 days per week was floated. It received enough political fire that the idea was quickly shelved.
Anyone who has been to the post office recently and who has been forced to stand in line for some sort of product or service has most likely experience the maddeningly slow and inefficient customer service. As someone who has lived all over the U.S. (in big cities and small towns) I can tell you my experiences are not isolated incidents. While the staff behind the counter may be friendly enough, they simply are not in a hurry to to anything. After all why should they? They are union members being paid a government salary with some of the best healthcare and retirement benefits in public service. They get paid whether the line stretches out the door or whether there are no customers at all.
Whenever the idea of closing unprofitable offices is debated, small towns and rural areas like to cry foul. They argue that the post office is a pillar of their social community. These post offices function as a social gathering place as well as providing a needed connection to the outside world. While that may be true in some cases, the social gatherings of people should not be a concern of the federal government or of taxpayers.
Unlike businesses in the private sector who have experienced a decrease in customer traffic or business, rather than improve service, increase product offerings, or cut prices, the USPS has chosen to continuously raise the cost of postage, and not offer new services. While the argument may be that rates need to be raised to keep up with inflation and increased costs, the increases simply force more customers into online bill paying, email, and the competition (FedEx and UPS).
The post office has served an important function throughout history, and continues to provide some valuable products and services. The problem is, like most government or quasi-government agencies, it has continued to grow, and has refused to change its technology and methods to keep up with the times. In my opinion there are three choices we can make when it comes to dealing with the post office’s continued unprofitability:
1. Continue on the current path and let tax payers continue bailing out the USPS with additional funding.
2. Drastically cut locations, cut employees, cut prices, improve customer service, improve product offerings, eliminate the union, and bring pay and benefits in line with the rest of the government sector so it can better compete.
3. Allow privatization of the USPS and asassociated services. I am sure that there are companies out there willing to bid for the opportunity to operate the service for 5-10 years at a time, and who could do so profitably.
Really, option 2 and 3 are the only plausible ways to continue operating and save taxpayer money at the same time. Option 3 is probably the most effective and profitable of the three, but also the most likely to be fought by the left in this country.

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