It looks like the aftershocks dispersed by the 2008-09 financial crisis are still rippling their way through the economy these many years later. The latest hit is being felt by the U.S. postal service, which has suffered from diminished demand for mail services during the economic downturn of the past five years.
You might like to know the service is not going to go down without a fight. But you might not like to know just how they are doing it – dragging you into their battle. The critics are already calling it counter-productive.
Postage Price Hikes
The Postal Regulatory Commission recently approved a rate hike of three cents on first class postage, which is set to rise from 46 to 49 cents effective January 26th, along with a one cent increase on postcard stamps to 34 cents announced last month. This will be the second increase in 12 months, after postage was raised by a cent last January.
Falling demand for postal services during the economic slowdown of the past five years has cost the postal service billions in lost revenues, some $5 billion just in the latest fiscal year alone. Already fighting a losing battle against email for some two decades now, postal authorities see the rate increase as life support for an ailing service.
As with most any other price increase, this one is supposed to be temporary, just for a couple of years or so until the economy picks up again and the demand for mail service along with it. The increase “will last just long enough to recover the loss,” Commission Chairman Ruth Y. Goldway promised in a press release.
But just as you’re coming close to understanding the reason given for the rate increase – namely the economic slowdown – your mind then gets taken back by the news of additional rate increases of 6% for bulk mail, periodicals and packages, which will impact the struggling business sector.
I’ll give you a second for your eyes to stop bouncing around in their sockets.
A Shot in the Foot
Normally when a company loses business, it slashes prices to draw customers back. This would be even more imperative when your biggest competitor is giving away its services for free – namely email.
“This is a counterproductive decision,” Mary G. Berner, president of the Association of Magazine Media, criticized to the Associated Press. “It will drive more customers away from using the Postal Service.”
And if that isn’t bad enough, the postal service is increasing the rates it charges the very segment of the economy that it acknowledges has been hurt the most by the economic downturn – businesses.
“[This] will have ripple effects through our economy — hurting consumers, forcing layoffs and impacting businesses,” Berner extrapolated.
Businesses and groups who use commercial bulk mail services extensively – which include charities, bookstores and greeting card services – have wasted no time criticizing the exceptionally high 6% increase they’ll be facing, which is almost four times the 1.7% rate of inflation. Berner’s association is already contemplating challenging the increases in the U.S. Court of Appeals.
Evolution Before Our Eyes
Stepping back a bit to take the whole picture in, we get a better sense of what is really taking place here. What we are witnessing is the evolutionary process of our communications. The snail is going the way of the dinosaur, and it’s the economics of the business that is dragging it there.
In fiscal year 2012 the postal service lost some $15.9 billion. Indeed, it did manage to trim its expenses, drastically cutting its operating losses to just $5 billion in FY 2013. But you might not like to know how they did it. Among other cutbacks, they defaulted on pension and benefit payments to retired and existing workers – three times.
Since the postal service is not funded by the government, it cannot ask for taxpayer money, but must be self-sustaining. Further cost-saving measures being considered include scrapping Saturday mail delivery and reducing retiree health benefits. But since the service is overseen by Congress, it cannot affect these changes of its own accord, and is thus appealing to legislators.
But perhaps the postal service might consider appealing to the general public as well, an appeal to help save the most endearing and personalized form of communication known to man – the handwritten letter.
In an age of impersonal computer-rendered typed print, the warmth of emotion accompanying hand-drawn script is slowly slipping through our fingers, about to be forever lost like the passing of an ancient ritual that once bonded families and friends together even when separated by vast distances.
While photos and video can bridge those distances in their own light-hearted way, nothing reaches deep inside you like the efforts taken by a loved one as they personally express their appreciation for you – delivered by hand to your very door by your local postal service employees.
Surely the preservation of such a touching tradition is worth an extra three cents, wouldn’t you think?
Joseph Cafariello
