The Price of Postal Stamps

January 03, 1995

Now that we're paying three cents more to mail a letter -- a 10 percent increase -- is 32 cents too high? Compared with the price of postage in other industrialized nations, the new U.S. rate is cheap. In Germany, it costs 64 cents; in Japan, you'd be licking an 81-cent stamp.

Compared with inflation, the price increase is also cheap. This is the first rate hike in four years -- the longest stretch of rate tranquillity in 24 years. The percentage increase is 10.3. Yet inflation amounted to 12.2 percent.

The average householder will pay roughly $9 a year to cover the higher cost. On a weekly basis, that adds up to only 17 cents more out of average disposable income.

This year, the Postal Service will handle 177 billion pieces of mail -- half a billion a day. The vast majority get delivered fairly promptly, too.

Not that the Postal Service is ideal. It isn't. Postmaster General Marvin Runyon admits he's got a long way to go to change its autocratic culture. It is not an easy job: He's got to persuade a company with 750,000 employees to act less like a military unit and more like a consumer-oriented business.

There are some signs of progress. Delivery rates have improved in the Baltimore region -- one of the most troubled. Restructuring has cut administrative costs 30 percent. Union leaders seem receptive to efforts aimed at giving managers flexibility to make working conditions conducive to higher productivity.

But dark clouds loom. The Republican Congress could force the Postal Service to help shoulder the burden of reducing the federal deficit -- or at least help to pay for Republican tax cuts -- by making it prefund employee health benefits. That would cost a whopping $11.6 billion. Should that happen, Republicans might claim credit for a tax cut, but they also would be responsible for another postal rate hike as early as 1996.

Despite chronic complaints, mail delivery is pretty good. But Congress needs to give postal officials increased authority to run the agency more like a business and less like a government bureaucracy. As Mr. Runyon put it, "We've got to improve. We are in a competitive world. If we don't compete, we won't exist -- or prices will be so high no one will bother with our service."

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