The U.S. Postal Service delivers 40 percent of the world’s mail to 153 million U. S. homes and businesses from coast to coast, six and increasingly seven days a week. It’s older than the country itself and is consistently rated the public’s most-trusted federal agency.
And yet there are misconceptions about it that circulate in the media or on websites, as was the case in a recent commentary piece in Economics21. To advance its agenda—privatization—the article deprived the reader of relevant information while painting a misleading picture of postal finances, blaming the government and employees instead of the actual culprit.
Given the importance of the USPS to residents and businesses throughout the country, I’d like to take this opportunity to offer some facts and some context.
For starters, the Postal Service is operating in the black, and has been since 2013. Its earned revenue exceeded operating expenses by more than a billion dollars apiece in both fiscal year 2014 and 2015. In just the first two quarters of FY 2016, the operating profit stands at $1.8 billion—meaning that over the past two-and-a-half years, Postal Service operations are $4.4 billion in the black.
After a significant decline in first-class mail during the worst recession in 80 years, first class mail is stabilizing as the economy gradually improves. Meanwhile, Internet-sparked online shopping has sent package delivery revenues skyrocketing. And so, overall revenue at USPS has been increasing for the past four years. Record worker productivity has played a role as well.
There is red ink, but it has nothing to do with the mail and everything to do with flawed public policy. In 2006, a lame-duck Congress mandated that the Postal Service pre-fund future retiree health benefits decades in advance. No other entity in the country, public or private, has to pre-fund these benefits for even one year. That mandate, costing $5.6 billion annually, not only accounts for the red ink; it disguises the actual profits postal operations have been generating for years. (It’s important to note that this debit goes on the ledger each year as a loss, whether or not USPS can afford to pay it, thereby producing the ‘red ink.’)
Addressing this elephant in the room—pre-funding—is imperative because of the Postal Service’s role in so many facets of American life, including in small towns and rural areas, where the post office often is the center of civic life.
More broadly, the Postal Service is the centerpiece of the $1.3 trillion national mailing industry, which employs 7.5 million Americans in the private sector.
It’s also the nation’s largest civilian employer of military veterans. Nearly one-quarter of letter carriers are wearing their second uniform.
USPS and letter carriers play a key role in the quality of life of communities throughout the country. In mid-May, letter carriers conducted their 24th annual food drive—the largest single-day food drive in the country—collecting a record 80 million pounds of food from generous Americans to help replenish food banks, pantries and shelters from coast to coast.
Every day as they deliver mail on their routes, letter carriers around the country help save the elderly or other residents who have fallen or experienced medical problems, locate missing children, rescue people after automobile accidents or help stop crimes in progress.
The Postal Service and letter carriers also play a role in national security. After the terrorist attacks of 9/11, when President George W. Bush sought a way to protect Americans in the event of a bio-terror attack, he turned to the nation’s only universal delivery network, the U.S. Postal Service. Letter carriers have volunteered to be trained to stockpile and deliver medicines to every household in several major metropolitan areas within 48 hours of an attack, to save lives and avert panic. Just imagine what it would cost to set up such a program from scratch.
These are just some of the reasons why the Postal Service—based in the Constitution and first led by Benjamin Franklin—enjoys enthusiastic support from the public and from lawmakers across the political spectrum, including many conservatives.
If congressional representatives work toward constructive and targeted postal reform that addresses pre-funding while preserving and strengthening the invaluable and profitable postal networks, the Postal Service can continue to provide all Americans with the industrial world’s most affordable delivery services.
Mr. Rolando is president of the National Association of Letter Carriers.
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