Market demand and the Postal Service

Market demand and the Postal Service

November 18th, 2011 in Opinion Free Press

With neighborhood post offices long having been something of an institution in the United States, it is painful to see the dire financial woes that the U.S. Postal Service is now suffering.

The Postal Service reported recently that it lost more than $5 billion during the fiscal year that ended in September. And that already huge figure would have been more than $10 billion if Congress had not postponed about $5.5 billion in Postal Service payments to fund retiree health benefits.

There is no real mystery about why the Postal Service has fallen on such hard times. About 3 billion fewer pieces of mail were delivered by the Postal Service this past year than were delivered the year before. And that is on top of massive drops in mail volume in earlier years.

The decrease has been caused by rapidly growing use by the public of the Internet to pay bills and send correspondence. People just aren't using traditional mail nearly to the same degree that they did in the past.

Solutions are not readily apparent.

The Postal Service cannot very well ask the American people simply to stop using the Internet and to return to slower, traditional mail.

And no one likes the prospect, in this weak economy, of big layoffs from the Postal Service. But at the same time, Congress should not simply prop up the post office in defiance of plunging market demand for its services.

Meanwhile, suggestions of shuttering under-used post offices have been met with resistance in a number of communities.

Still, as much as we are concerned about the jobs of those who work for the huge U.S. Postal Service, the agency should be sized to meet actual demand.

And in no case should taxpayers be required to provide any sort of bailout.