danajohnhill.org | Hard Times Come Again No More

I am a staunch defender of the United States Postal Service. When you think about it, it is a minor miracle that, for 45¢, you can put an envelope in a small box at the end of your driveway (or in some cases, right outside your front door), and in three days or less, that envelope is in the hands of a loved one (or enemy), who appreciates the gesture (or quakes in fear).

Some people, though, do not appreciate the USPS the way I do, or recognize the astonishing bargain we receive as Americans. Some people, believing that electronic communication and overnight carriers are the future, advocate for the privatization of the USPS. I could not disagree more. Perhaps these people pay all their bills online, and never send small packages or postcards. Certainly, they are upset by the massive deficits the Postal Service runs year after year. The latter is an understandable concern, but one, we shall see, can be remedied. The other complaints, however, are short-sighted and, frankly, selfish.

The Postal Service’s woes are in the headlines this week because it just missed a multi-billion-dollar payment to its retired employee benefit fund. It will likely miss another in September. And it is claimed that the USPS is losing up to $25 million every day. So, proposals to end Saturday delivery, close post offices and processing centers, and even privatize the service get floated around in newspaper op-eds and on radio talk shows. Indeed, earlier this year it appeared that Gainesville—which already lost its downtown post office—would lose its processing facility, too, meaning that mail leaving Gainesville would have to travel to Jacksonville for processing, then on to its destination. The Gainesville postmark would no longer be used, and letters would take an extra day to reach their recipients. I viewed this as a minor catastrophe. Congress, which oversees the Postal Service, put off implementing these cuts, but, clearly, unless some changes are made, they will ultimately come to pass. I sincerely hope the privatization never does.

Privatization, according to its proponents, would look something like this: the Postal Service would sever its ties to the federal government, would review its costs and revenues, and would create a new business model centered on making mail delivery profitable. This seems simple enough, and its proponents cite the potential for vast increases in effeciency with congress out of the picture. Fine. But the privatization crowd does not consider some crucial facts:

1. The USPS, by law, must provide universal service. It must deliver to every address in America, including countless homes and businesses in far-flung places, from the Gates of the Arctic to the South Dakota badlands, to the remotest Hawaiian island. It delivers to these addresses for no more than the cost of first-class postage. The Cato Institute would have you believe that a privatized system that charges rates based on delivery costs would be more profitable. While it is certainly true that the Postal Service is losing money on that postcard to Barrow, Alaska, it is foolish to believe that raising the price to reflect the true cost of delivery could ever earn the USPS, or any carrier, a profit. Would you mail a birthday card to your grandmother in Barrow if it cost you $47 to do so? Of course not. Rural delivery would instantly cease.
2. The USPS delivers approximately a third of all FedEx packages and millions of UPS parcels. Those two companies could simply not exist without the USPS. Indeed, FedEx and UPS readily admit they could not possibly deliver packages to rural addresses at a profit. Instead, they take their packages to the post office and the USPS delivers them.
3. Critics often claim that, in the days of electronic mail and UPS, the United States Postal Service is pointless. These critics must hate receiving post cards and letters, or sending books and compact discs across the country for less than $2.00. E-cards are no substitute for the real thing, and the so-called overnight delivery services do not offer a service comparable to the USPS. But books and CDs are technologies of the past, you say? Fact: most books are still read in print, and most music is still sold on physical media, be it compact disc or vinyl. Netflix may someday have every film available for instant viewing online, but for now only a tiny fraction of movies and TV shows can be streamed. And even then, forty percent of Americans lack access to broadband service to enjoy them. Tens of millions of people still get cards and letters each day.
4. The importance of this one cannot be overstated: the USPS keeps track of all new addresses. It is a key component of its job. Every new house that gets built, every new high rise, every new restaurant, sports arena, and bank branch gets an address—often from the local permiting agency, but sometimes from the Postal Service itself—and the USPS adds it to the system. This has been happening for hundreds of years in the United States.

Critics are right to be concerned about a USPS bleeding red ink. But the problem is largely an artificial one. That is, almost ninety percent of the Postal Service’s deficits come from the congressionally-mandated pre-funding of future retirement benefits, in spite of the fact that the USPS has tens of billions of dollars already set aside for this expense. Even the president of the union that represents postal workers has been pushing hard to stop this madness. The retirees will be covered. Eliminating this pre-payment will put the Postal Service near the break-even mark. Closing some post office branches is probably advisable. We lost one in Gainesville, but have several left. The same thing could surely be said of some other cities with multiple post office branches in close proximity to one another. Meanwhile, the USPS could probably do without selling stupid stuff like mouse pads and graduation cards in its branch offices. I doubt anybody buys them, and it costs money to keep around. The gradual introduction of a more fuel-efficient fleet will save a ton of money. I have heard other great ideas, too.

All of this is to say that the United States Post Office is undoubtedly the finest in the world and a minor miracle. Its problems are actually relatively minor and have fairly straightforward solutions. To borrow a phrase from the coalition of architects who fought unsuccessfully to save Penn Station in New York City, “Renovate! Don’t Amputate!”

Filed under: Current Events, Politics, Rantings on August 6th, 2012 | 3 Comments »

The New York Times runs a series called “Room for Debate”, in which they ask a supposedly diverse group of experts to weigh in on a particular issue. Today the topic is “Should the U.S. Seek More Tech Manufacturing?” I can hardly imagine what would prompt someone to say, “no, we don’t want that”, but, lo, some of these “experts” do just that.

It is, perhaps, wishful thinking to imagine Apple moving production of the iPhone and iPad to the United States. The profit margin on those products is enormous (reportedly 70% for the iPhone 4s), and is the result of extremely low production costs in China. Apple could make the iPhone in America at a profit, but why would it?

Incentives would be required. Though I loathe the idea of corporate welfare, I am pragmatic enough to embrace it if it brings about a desired benefit to American workers. Imagine, for instance, that Detroit formed a partnership with Apple to lure iPhone production to that city, which desperately needs manufacturing jobs. The city could provide a free lease on property for production facilities; property taxes could be waved; the state and local governments could join forces to provide training for new workers, and so on. These are huge freebies, but would be more than offset by the tremendous number of new jobs to the community. The workers would have an income. People would move back to Detroit. Lots of people.

If Apple made the iPhone in Detroit, tens of thousands of jobs would be the result. If other manufacturers of not just technology products, but durable goods, textiles, tools, and countless other household goods moved production back to the USA, the benefit would be incalculable. Hundreds of thousands of jobs that this country lost would come back. They would be different from the glory days of American manufacturing, and they might be so-called “low-skilled” jobs. They certainly wouldn’t pay $24 per hour. But so what? Why should we look down our noses at low-skilled manufacturing jobs, as “experts” so often do in op-eds and magazine features?

Assembly line work, while not glamorous or particularly pleasant—both Smith and Marx acknowledged its alienating potential—is still honest work. What those who dismiss the idea of an American manufacturing renaissance fail to acknowledge—with their scorn for “low-skilled” work—is that not all Americans can get advanced degrees in electrical engineering or computer science. Indeed, far more people will get no college at all, and many will not finish high school. While it would be better if we all got as much education as possible, life doesn’t always work out that way. We need to be realistic and practical, and not shun one sort of job because it doesn’t match our utopian vision in which American workers spend their days developing apps and software. The unskilled don’t go away just because we want to have high-tech, high-skill, high-paying jobs. And there aren’t enough Wal-Marts, Burger Kings, and Winn-Dixies in America to employ them all.

Take a look at almost any item sitting on your desk in front of you, or lying about you in your home. Chances are it was made in China. Your clothes, too, were likely made overseas. Twenty-five years ago that wasn’t the case. Almost everything you owned would have been made in America, by someone in a factory, large or small. Your television, toaster, sweatpants, shoes, stapler, dinner plates, kitchen cabinets, washing machine, frying pan, telephone, baseball cap, piano, faucet, weed trimmer, bypass pruners, electric drill, children’s books, board games, and countless other objects were once made by American workers who likely didn’t go to college, but whose assembly line jobs provided them the means to live a middle-class life.

I cannot think of any good reason we wouldn’t want that back, and the so-called experts aren’t persuading me I’m wrong.

Filed under: Current Events, Rantings on August 6th, 2012 | No Comments »