29-Cent Postal Charade

January 29, 1991

Even the postmaster general is laughing at the ludicrous decision by the Postal Rate Commission to impose a new first-class postage rate on Feb. 3 of 29 cents, instead of the requested 30 cents. It is bad enough that postal costs rise so quickly that prices must be hiked every few years. But to settle on the odd-ball figure of 29 cents simply creates a new irritant for the American consumer.

Why 29 cents? As Postmaster General Anthony M. Frank noted, all it will do is prove a boon for the copper mines, since billions of pennies will be needed to provide change when customers purchase their stamps. Besides, the extra penny requested on the postal rate would have delayed the next expected increase until 1996. Now, Mr. Frank says you can expect another stamp hike in 1995.

Postal officials claim they are giving consumers a break. First-class postage is being raised 16 percent, but second-class postage (newspapers and magazines) is rising 22 percent, and third-class postage (bulk delivery and junk mail) 25 percent. More of the burden will be placed on businesses.

But why 29 cents? The annual savings for the average family will be a mere $2. Even worse, the commission approved a 27-cent stamp for paying bills with preprinted envelopes. That will confuse just about everyone.

There's no mystery why postal rates keep rising: high labor costs. Of the new 29-cent rate, 25 cents will be consumed by wages and benefits. The average base salary of postal workers ($29,444) is higher than wages given teachers or police officers. A Department of Labor study found that mail handlers for the Postal Service are paid nearly twice as much as counterparts in private industry.

Postal unions aren't about to give up these wage advantages. Worsening the situation is a new approach by Congress to ease the budget deficit: dump more expenses on the Postal Service. Another $5 billion in extra costs was added to the postal budget by Congress last year. That, too, makes it difficult to avoid postage increases.

Mr. Frank has made strides in curbing overhead and emphasizing automation, shaving last year's estimated $1.5 billion deficit nearly in half. But real progress toward stabilizing postal prices won't happen until labor costs are reduced -- or the postal work force is dramatically cut. For now, we will have to learn to live with that albatross, the preposterous 29-cent stamp.

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