Ask More of Business

Asking More Commentary: Perspectives from Mendoza College of Business

Commentary Post - James S. O'Rourke

Not rain, sleet or even the Internet should stop the mail

September 7, 2011

 The financial problems of the U.S. Postal Service began long before the Internet age and are much the same as those experienced by U.S. automakers, manufacturers, and other large, complex organizations.  They have huge infrastructure support costs, enormous pension obligations, and an unmanageable  health care legacy.  All of those issues must be controlled for the USPS to survive.

It’s important that the Postal Service does survive, though.  First, all of the revenue loss associated with the disappearance of first class and overnight package delivery service will not be made up by increasing rates on bulk mail items.  Our postal service is simply going to have to become smaller, more efficient and more self-reliant.  That means USPS employees will have to share some responsibility for their health-care costs and learn to manage a 401k like many other workers.

But the claim that we can do without a postal service because now “everything moves by email on the Internet” is simply false.  The Pew Research Project on the Internet and American Life has documented that 33 percent of Americans have no connection to the Internet (no Wi-Fi, no broadband, no cable modem).  The figure rises to something near 60 percent globally.  Smart phones and cellular technology will eventually provide many people with a cheap, efficient connection to the Internet, but that’s no substitute for regular mail delivery. 

We simply cannot run a democracy without a post office.  Technology has changed some of the ways in which we connect with one another, but it hasn’t entirely eliminated the need to move paper and other objects through the mail.  Private sector competitors simply cannot provide the same service at the same price, particularly in non-urban settings.