THE IRET PAPER ONLY TELLS PART OF THE STORY

The following is a postal perspective by Jessica Dauer Lowrance. It represents the views of the author.

The struggling Postal Service has yet another hurdle to overcome in the recent Institute for Research in Economics and Taxation paper by Michael Schuyer titled "Most Foreign Postal Services are Profitable; the U.S. Postal Service Lags." Although Schuyer has laid out the financial facts of the U.S. Postal Service and other foreign posts as reported to the Universal Postal Union (UPU), he has missed explaining the reasons why these figures are as they are. Without this explanation, the paper is unfinished and leaves the reader with a false sense of understanding the issues.

Other foreign posts are not faced with the same financial burdens of the U.S. Postal Service. They are not required to prefund their retiree health benefits to the tune of $5.5 billion (yes, billion) annually. They are allowed to shed their excess capacity and employees without interference or political posturing. They can change their delivery frequency without fighting a thirty year appropriations rider in their government’s annual budget process. They can offer "non-postal" products and diversify their business to earn additional income to help offset mail declines from electronic diversion. They face less regulation and a lower burden to react quickly and adjust to change.

Through the introduction of competition, these foreign posts and their governments have agreed that a general calculation known as the "universal service cost" is being calculated n order to provide these posts with a subsidy helping to fund, as Schuyer out it, ". . . to deliver mail and supply the public with postal access while remaining financially viable."

What is most disturbing is that the Institute and this paper purport to serve as a congressional advisory to "foster a wider understanding of basic economics among public policy officials, the media, and the general public." Many members of Congress and their staff read these types of papers to get factual information to help shape public policy. By not explaining why the Postal Service generates consistent losses, Schuyer does a disservice to the reader.