Pandemic Diary Day 23
April 16, 2020
During the Covid-19 Shelter in Place, there has been an awful lot of discussion about privatizing the post office, and I wanted to see why.
Did you know that the USPS while still delivering mail six days a week has over 150 million locations, 26,401 post offices, handles over 150 Billion with a B pieces of mail, which is 47% of all the mail in the world. The Post Office with its 618,000 employees is larger than any non-governmental employer including WalMart. And despite the grumbling the USPS is the federal government’s most favorably viewed agency, with an approval rating of 90%.
So why do people want to shut it down? Let’s first talk about a little history. Our mail service is the oldest federal agency and the only agency authorized in our constitution. On February 20, 1772 George Washington authorized congress to establish the Post Offices and Post Roads Department. At the time the post offices were set up to be self sufficient.
After the financial crash of 1837 Congress began providing government subsidies, and then the Great Depression created such difficult funding problems that essentially, the Post Office Department never really worked its way out of debt from there.
For over 50 years portions of our political bodies have been attempting to privatize the Post Office, beginning in 1970 with turning it into an independent agency required to be self sufficient and creating the United States Postal Service (USPS) out of the Post Office Department
A part of the problem is the precipitous drop in mail delivery. First-class mail, the USPS’s most profitable product has seen its volume shrink by 45 percent since 2001.
However, its larger problem was created when Congress passed the Postal Accountability and Enhancement Act of 2006. Before this act the USPS operated a pay-as-you-go model for their retiree health care. This 2006 law requires the USPS to calculate all of its likely pension costs over the next 75 years, and bank enough money between 2007 and 2016 to cover most of that obligation, this amounts to an extra $5.6 billion per year. To add insult to injury, these investments were required to be exclusively in goverment bonds. While safe, these have not performed well enough to produce enough monies to support the retirement system, forcing the USPS to spend even more money to prop up their retirement health bank account.
The USPS was originally expected to completely run out of liquidity by 2021, that has been sped up to the summer of this year thanks to Covid-19.
While members of our government moan about the lack of financial savvy in the USPS part of the problem lies with Congress. Congress restricts the USPS’s pricing flexibility, and prevents it from cutting costs in various ways, such as reducing delivery frequency and closing low-volume post offices.
Most people consider their mailbox irrelevant, and frustrated that it fills with not much more than junk mail and an occasional birthday card, but it is so much more. The USPS delivers around 1 million medications a year, including mine. The USPS often serves as the only delivery service to people living in rural areas. In fact Fed Ex and UPS both use the USPS for the last “10 miles” of delivery in rural areas. This year it is also vital in delivering the 2020 Census, and should our nation finally realize how mail-in voting is cost effective, wise and allows us to maintain social distancing it will be the major deliverer of ballots across the country.
While a completely different topic it is important to note here that in 2016, California passed SB 450 which allows counties to offer vote by mail. In 2018, the last year that statistics are available, 67.7% of Californians voted by mail in the primary and 65.31% in the general election, proving it can be done. In fact vote by mail has shown to increase voter participation, something we should all be applauding.
Some politicians would like to give post offices the ability to provide basic financial services, including check-cashing and small, low-interest loans. The local post offices, especially in rural areas, could also provide faxing, notary publics, and hunting and fishing licenses.
For those of us that live in big cities with ATMs on every block and on-line banking a way of life, we need to be aware that this is not the case in much of our country. A Federal Reserve report shows that “more than half of U.S. counties lost access to bank branches between 2012 and 2017. Nearly 800 rural counties lost 1,533 bank branches, representing 14% of their total branches” and therefore no ATMs or tellers. The report went on to say: “Rural counties deeply affected by branch closures had higher poverty rates, lower median incomes, a higher share of their population with less than a high school degree, and a higher share of their population who were African American,” exactly the people that have less access to banking on-line.
Sure there is lots of room for improvement in the USPS, but Congress needs to take a look at the onus they have placed on the USPS to actually turn a profit.
In 2013, the New York Times reported that the USPS would start making Sunday deliveries for Amazon. This was to be a boon to the USPS bottom line.
It hasn’t worked out that way according to a report published by Josh Sandbulte in the Wall Street Journal, the USPS has been subsidizing Amazon, who has simply found a loophole in the Postal Accountability and Enhancement Act . The law keeps the USPS from changing the price for handling parcels, a law specifically designed to avoid “unfair competition” with FedEx and UPS.
So why not let someone privatize the USPS. First, remember, if that was to happen it would most likely go the way of privatized prisons, shown to be so horrendous that have been outlawed in California.
The entity privatizing would most likely be a publicly traded company, and if it holds true to most large businesses in the US, would cater to its shareholders before it cared about its customers.
A private entitity would absolutely cut down delivery days, but it would also most likely eliminate delivery to your door, and instead establish central locations you would have to visit to retrieve your mail . It would also reduce or eliminate health and retirement plans, and cut wages to the bone.
If Covid-19 has shown us anything, we undervalue workers in less than “elite” jobs. Once this is all over, tossing them back on the trash heap with no benefits and bare minimum wages is something I hope we have seen, is not compassionate or humane.
The USPS in one form or another has been with us since 1772, while its future is not in my hands, I personally would hate to see it disappear.
My Horoscope for today: You need to reconnect to the underlying purpose for why you do what you do. Short cuts and quick fixes have thrown you off track recently.
The NYT Crossword Puzzle: Easy, but it would have been easier if I could spell
San Francisco weather: 57 degrees and cloudy
NYSE DOW opened at: 23543
Italian word of the day: schieramento (deployment)
Spanish word of the day: el caucho (rubber)
OED word of the day: Henriad
When the OED words are this obscure I have agreed to put up the definition, as sometimes they are the only source for these obscure sometimes obsolete words.
[‘With the and capital initial, as the Henriad: Shakespeare’s four historical plays, Richard II , Henry IV, Pt. 1 , Henry IV, Pt. 2 , and Henry V , considered as a group or performed as a cycle.’]
Days under Shelter In Place: 34
Reading: The Private Papers of Henry Ryecroft by George Gissing
Reading Canto XXII, XXIII, XXIV of Dante’s Inferno
My Black and White Picture of the Day
Something Silly From the Internet: I don’t think anyone expected that when we changed the clocks we’d go from Standard Time to the Twilight Zone
If you liked this please clap and let me know. Thank you