A Phil Hall Op-Ed: Another Postage Rate Hike?

A Phil Hall Op-Ed:

A Phil Hall Op-Ed: There is a quip, incorrectly attributed to Albert Einstein, that says, “Insanity is doing the same thing over and over again and expecting different results.” A prime example of that foolishness in motion can be seen at the U.S. Postal Service (USPS).

The good folks who deliver our mail and parcels are expecting to lose $6.3 billion this year. And how are they planning to halt their hemorrhaging losses? Simple: by raising the cost of postage. The latest proposed postage hike would include the increase of first-class stamps from 68 cents to 73 cents, as of July 14. Also being jacked up is the price of domestic postcards from 53 cents to 56 cents and international postcards from $1.55 to $1.65.

So, why is this an example of insanity? Because this would be the second price hike this year and the fifth in two years. And lest we forget, two years ago Postmaster General Louis DeJoy said Americans need to get used to “uncomfortable” postage rate increases because that is how he plans to recalibrate the USPS to achieve “our objective of projecting a trajectory that shows us being self-sustaining.”

“I believe we have been severely damaged by at least 10 years of a defective pricing model which cannot be satisfied by one or two annual price increases, especially in this inflationary environment,” said DeJoy in an April 2022 interview.

Well, is there any evidence that this strategy is working? Remember, the USPS is looking at a potential $6.3 billion loss for this year. Clearly, this is an issue which is not going to be solved by jacking up the price of stamps.

Whenever the postage costs are increased, the USPS always rushes out a reminder that its prices “remain among the most affordable in the world.” Personally, I don’t care about postage prices in other countries – I’m focused on my country, and all I know is that it will cost me even more to send mail. Plus, any merchandise I buy from an e-commerce site will also become more expensive because vendors will pass along the elevated costs of shipping and handling to their customers. For real estate professionals who rely on the USPS for their direct mail marketing, invoicing and other business needs, this will be yet another operational expense.

The flippant answer to this issue would be to turn your back on the USPS and do everything online. But U.S. Rep. Ritchie Torres (D-NY) pointed out that many Americans are not able to follow that strategy.

“An 8% rise in the cost of stamps will have a disparate impact on those hit hardest by inflation, particularly senior citizens struggling to scrape by,” said Torres in a letter to DeJoy that he shared with The Hill. “When you are living on a fixed income, every dollar counts. When you find yourself at the wrong end of the digital divide, the postal service is not a luxury but a necessity. The U.S. Postal Service has an obligation to ensure that the service it offers remains affordable to the lowest-income families who live on a fixed income and who lack access to the internet. I strongly urge the U.S. Postal Service to seriously reconsider price increases that would compound the impact of inflation and impose a financial burden on those who can least afford it.”

The cost of postage is not a primary issue that Americans are fixated upon, but maybe it needs to be included in the wider public conversation regarding the destructive impact of inflation on U.S. consumers and businesses. Also, maybe it is time for DeJoy to be jettisoned in favor of new USPS leadership who can come up with more innovative and effective strategies to wipe up the agency’s red ink and bring it back to profitability – and, by extension, save all of us some much-needed money.

ENB
Sandstone Group