July 29, 2011

Who Should Pay for Neighborhood Post Offices?

July 29, 2011

This week the Washington Post reported that the U.S. Postal Service plans to close 3,700 post offices, including 32 in the DC metro area. Should we care? Or do email, Twitter, Facebook, and electronic banking make the Postal Service obsolete?

Throughout its more than 230-year history, the postal system has had a civic as well as an economic mandate: to provide access to information for preserving democracy, fostering commerce, and promoting the general welfare. It’s a public good and a great equalizer insofar as it serves rich and poor, urban and rural, young and old, unhealthy and hale.

When the Postal Regulatory Commission (PRC) asked the Urban Institute to identify post offices’ benefits to individuals and society, we reviewed many reports and studies  and interviewed PRC commissioners and staff, USPS officials, and leaders of organizations representing postmasters, letter carriers, publishers, advertisers, and nonprofits. We also spoke with economists and researchers specializing in regulatory economics, postal history and operations, and community and economic development. We came up with eight important benefit categories (to read our full report, look here):

  • Consumer benefits—a competitive baseline for other package delivery services and access to goods and services for the elderly, immigrants, and those with low incomes
  • Business benefits—the receipt of supplies in rural or remote locations, support of catalog businesses, and generation of economic activity at shops and offices near post offices
  • Safety and security—mail carriers’ role as a form of neighborhood watch and the Postal Service’s role in reestablishing contact with populations after natural disasters and in civil defense and biomedical emergencies
  • Environmental benefits—economies of scale and scope to reduce carbon emissions and fuel usage; first- and last-mile delivery on behalf of other companies to reduce neighborhood traffic; a role in online shopping and merchandise returns; and a way to recycle electronic items such as cell phones
  • Aid in the delivery of other government services—voting and voter registration, census completion, and applications for absentee ballots and passports
  • Information exchange—delivering journals, newspapers, newsletters, and magazines
  • Social links—delivering personal correspondence and connecting people  through the postmaster, post office staff, and mail carriers
  • Civic pride—fostering patriotism by providing a symbol of the federal government in local communities and promoting community identity through local post offices and services that support civic engagement

Social benefits, though hard to quantify, contribute to individual and community well-being. But who should pay for these benefits?  Right now, the Postal Service is losing money—$8 billion for each of the last two years.

It’s natural to want full service without paying the full costs. But if we insist on Saturday delivery, convenient local post offices, reduced rates for nonprofit and community organizations, and other social benefits as the right of citizens, we can’t expect the Postal Service to operate in the black as mail volume drops.

The “village” model of post offices that would expand a range of mail services at retail outlets is a start in rethinking how the Postal Service can adapt to changing demands.  We should use this opportunity to think creatively about how communities can retain the services they value, whether in the familiar local post office or enhancing other community gathering places and local businesses.

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As an organization, the Urban Institute does not take positions on issues. Experts are independent and empowered to share their evidence-based views and recommendations shaped by research.

Comments

I do pay, in the form of using Postal Services. I could survive a closure of my local office if the same services were offered online, but all are not. So in many cases I am forced to use their retail operations in order to get certain things done.

Less is more. Would like USPS to offer the option of weekly, bimonthly or monthly service please.

If 32 DC metro offices are closing...how many are still open and how many does one metro area really need to begin with????