Copyright 2000 Plain Dealer Publishing Co.
The
Plain Dealer
January 21, 2000 Friday, FINAL / ALL
SECTION: FORUM OF OPINION & IDEAS EDITORIALS
& FORUM; Pg. 9B
LENGTH: 755 words
HEADLINE: SELL THE U.S. POSTAL SERVICE - AND SAVE IT
FROM OBLIVION
BYLINE: By Ruth W. Goldway
BODY:
I have a proposal that would allow the
government and the people to benefit greatly from the stock market's growth.
United Parcel Service's record-breaking initial public offering demonstrated
that the company's market value was more than $80 billion. The U.S. Postal
Service should be sold as well.
Why would I, a consumer advocate and
liberal Democrat, push to privatize the Postal Service, with its 900,000
government employees? Simple: It's the best way to save it from oblivion and put
government resources to their most efficient and socially responsible use.
Only the market can determine what price the Postal Service could bring.
But if UPS, with about one-third the revenue, is a benchmark, then we can
estimate that federal coffers would benefit by more than $100 billion from the
sale of the Postal Service. Though it may not have the same reputation for
profitable performance as UPS (by law, the best it can do is break even), the
Postal Service's assets include real estate in the best parts of every city, a
universal delivery network and a solid brand name.
In recent years, the
Postal Service has raised its service standards, polished its image and
positioned itself to capture a significant share of the growing "e-tail"
package-delivery business. Although it would face stiff competition, its current
monopoly position gives it "first-mover advantage."
If, as now seems
likely, the computer and banking industries implement integrated online
bill-paying, the Postal Service could lose up to 30 percent of its mail
revenues. Because this financial correspondence revenue pays for much overhead,
postage rates will have to rise dramatically within a few years to compensate.
Unless the Postal Service can adapt to the rapidly changing world of electronic
commerce, consumers will pay substantially more for first-class stamps.
But under current law, any Postal Service idea for new, improved service
takes up to 10 months to get approved (by the commission, of which I am a
member), and in all rate proceedings, the Postal Service's
costs and competitive strategies are laid bare for its competitors to see.
Privatization would entail political trade-offs. The
postal unions cling to the job security the mail monopoly gives them, but to
give the Postal Service the freedom to compete, it would have to give up its
letter monopoly. A win-win solution is to give stock in the new corporation -
say 10 percent - to postal employees and let them have the management voice
they've always wanted. Employee ownership should spur productivity (which has
been flat), make employees more amenable to technological innovation and
encourage reasonable contract settlements. Unionized employees would have the
right to strike once the letter monopoly was abolished.
Consumers would
benefit from lower prices and better services, such as more retail outlets and
expanded hours and days of operation. Business users could easily contract for
special services.
In addition to the one-time windfall, federal and
state treasuries would have more funds for social programs. The new postal
corporation would be subject to the federal corporate income tax (reaping about
$1 billion annually) and state corporate and sales tax laws (about $3 billion
annually).
Privatization would also make the
Postal Service subject to the same laws that regulate other
companies. Consumers would have more protections because the Postal Service
finally would be subject to truth-in-advertising, antitrust, local zoning and
parking laws.
The industry would be regulated by a strong regulatory
commission, perhaps the FCC, which would oversee fitness standards for postal
operators to ensure privacy and security of the mails and mail depositories, and
be empowered to provide funds for subsidizing and guaranteeing universal service
if that should prove necessary. The Postal Service's historical properties could
be preserved as well.
This proposal is in step with the deregulation of
other utilities and of postal services worldwide. Numerous countries have
reduced or eliminated their postal monopolies, turning national posts into
semi-private or private corporations, and permitting or even encouraging
diversification into related businesses such as logistics and transportation.
We can look upon the government-owned Postal Service as money Americans
have been saving for a rainy day. After decades of investing billions in this
non-interest-bearing account, isn't it time to put these resources to work in
better ways? "
COLUMN: EDITORIALS & FORUM
LOAD-DATE: January 22, 2000 
