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Should the U.S. privatize the Postal Service? | Pro/Con

U.S. Rep. Dwight Evans of Philadelphia debates Heritage Foundation researcher David Ditch.

An unidentified customer enters the Fishtown post office in Philadelphia, Pa., on May 7, 2020.
An unidentified customer enters the Fishtown post office in Philadelphia, Pa., on May 7, 2020.Read moreDAVID MAIALETTI / Staff Photographer

The U.S. Postal Service has lately been a political lightning rod. Louis DeJoy, a Trump donor the president appointed as postmaster general in May after rejecting bailout funds for the USPS, has slashed its funding and staffing. Democratic politicians have since called for an investigation into DeJoy’s changes to the service. Residents are experiencing mail delays nationwide, with some Philadelphia neighborhoods waiting as long as three extra weeks.

Some critics of the USPS have suggested privatizing it, as the United Kingdom did in 2015, to fix inefficiencies. But others say it must be kept a public service. For this debate, The Inquirer asked a U.S. congressman representing Philadelphia and a researcher with the Heritage Foundation’s Center for the Federal Budget: Should the U.S. privatize the mail?

No: The USPS is a necessary public good.

By Dwight Evans

Critics of the U.S. Postal Service contend that it is outdated, inefficient, and consequently unnecessary. Of course, any system or institution subject to the neglect and disinvestment the USPS has seen over the last few years would grow worn and weary. But the USPS is a public good that must be protected. Given its role connecting people in the COVID-19 lockdown era, its relevance has never been greater.

On Nov. 3, we will participate in the national general election. The stakes on this year’s ballot are extraordinary. This election, unlike any in the U.S. for over 100 years, will have to be administered under the limitations of a global pandemic. To date, the Trump administration has demonstrated no ability to exercise a national strategy to contain the virus, and we cannot expect it will do so by November.

Accordingly, we must provide as many safe, secure, and public vehicles to participate in democracy as possible. In 2019, Gov. Tom Wolf signed Pennsylvania’s first vote-by-mail law. Unlike with absentee ballots, voters no longer need a reason to choose vote-by-mail. It is a right afforded to all eligible Pennsylvanians — a right that can only be effectively exercised with a viable USPS.

The Trump administration’s assault on the USPS is significantly undermining citizens’ ability to receive their mailed ballots and return them in time for their votes to count. In Philadelphia alone, I have received numerous constituent calls reporting their mail is no longer arriving on a daily basis — in some cases down to once a week.

I have also learned that retiring postal employees are intentionally not being replaced, critical letter sorting equipment has been pulled off the floor of our regional processing center, and letter carriers are being asked to work inordinate routes and hours, often putting them in harm’s way.

These are not just localized trends — such stories are rising from around the nation. Last week’s Michigan primary highlights how the Trump administration is able to disenfranchise voters through Postal Service disinvestment.

Preserving the right to vote is not the only priority defining the USPS’s necessity. Millions of Americans rely upon the Postal Service to receive life-sustaining medications. So long as lockdowns or restrictions are necessary, many other essential household items will only reach people if the Postal Service is functional. The USPS is facing an unprecedented parcel volume, and it is unreasonable to expect that volume can be met in a timely way by private carriers alone.

“Privatization would disregard the hardworking women and men who make the mail system go.”

U.S. Rep. Dwight Evans

Moreover, there are important equity and access issues that the Trump administration’s push toward privatization fails to consider. The ability to get your mail simply should not be a function of how much you make or where you live.

Privatization would also disregard the hardworking women and men who make the mail system go. Their jobs, benefits, and the service equity they provide will all be endangered. These fine Americans have served as essential workers long before the pandemic became our daily reality. They have trudged through challenging weather, terrain, and hazards daily to deliver our mail. Now they face all of those challenges — plus the invisible, deadly threat posed by the coronavirus. They deserve continued resources and protection, not to be continually maligned.

Government is not the answer for everything, but neither is the private sector. There is a time and place for both. The USPS serves a public good that cannot be adequately nor equitably replaced. It needs to be preserved and strengthened.

Dwight Evans represents Pennsylvania’s 3rd Congressional District, which includes Northwest and West Philadelphia and parts of North, South, Southwest, and Center City Philadelphia.

Yes: Privatization should be on the table if it will fix mail’s structural problems.

By David Ditch

“The Postal Service is in trouble” is a statement that would find bipartisan agreement. While there are competing estimates regarding when the U.S. Postal Service could go bankrupt, it is likely to occur within the next two years.

As such, Congress must act quickly to prevent a postal doomsday from occurring, and it should not rule out any effective reform options.

The financial problems facing the Postal Service have been building for decades. The spread of electronic messaging has caused consumer demand for first-class mail to plummet by 47% since 2001. Even an increase in revenue from package deliveries hasn’t been enough to prevent heavy losses: the organization has lost nearly $78 billion since 2007.

Yet, the struggle to maintain revenue is not the biggest problem facing the Postal Service.

Employee compensation consumes nearly all the revenue in a typical year. These costs have surged to an average of $97,588 per postal worker in 2019, compared with $69,440 for the private sector, per our analysis at the Heritage Foundation. Much of that gap is due to extraordinarily generous retirement benefits, which are currently underfunded by a staggering $120 billion.

“Many ‘solutions’ put forward amount to a blank check designed to maintain an unsustainable status quo.”

David Ditch

In addition, the Postal Service owns or leases tens of thousands of properties, many of which are retail locations with minimal foot traffic. Post office branches are politically coveted, but unless they serve enough customers, they place a burden on the system.

Many “solutions” put forward amount to a blank check designed to maintain an unsustainable status quo. A big bailout or a fat annual check from taxpayers would only serve to push the day of reckoning back a few years while further adding to our swollen national debt.

Rather than ignoring the systemic problems facing the Postal Service, legislators should be open to a range of reform options.

On the modest end of the spectrum, the Postal Service should be granted more leeway in controlling its own costs. Congress mandates that USPS deliver mail six days per week, bars it from adjusting employee compensation, and makes consolidating underused retail locations exceedingly difficult. Removing or lowering these legal barriers to cost savings would allow USPS to shrink and hopefully eliminate its annual deficits. Reducing the number of deliveries is especially long overdue given the reduction in volume.

» READ MORE: Destroy the Post Office and you destroy democracy. Maybe that’s Trump’s plan? | Will Bunch

To bolster revenue, the service should have more ability to develop its real estate portfolio, such as building housing or office space on top of ground-floor retail locations in urban areas. This would require some coordination with local governments, and would be a win-win for both cities and the Postal Service.

A bolder approach would involve following in the footsteps of countries such as Germany and the United Kingdom, which have opened first-class mail to competition, and either partially or fully privatized their legacy delivery agencies.

The robust market for package delivery in America and mail delivery in other countries shows that the private sector is fully capable of providing the service, and has every incentive to address the needs of urban and rural households alike.

Privatization would be a serious undertaking and is unlikely to gain congressional approval soon. However, that doesn’t mean we should exclude it from consideration.

National leaders should weigh all available options when deciding the best way to address Postal Service solvency. Ignoring the structural problems, or attempting to paper over them with debt, would be grossly irresponsible.

David Ditch is a research associate specializing in transportation issues for the Heritage Foundation’s Hermann Center for the Federal Budget.

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