The U.S. Postal Service delivering the mail for just over 250 years could soon be over due to the government’s arch nemesis — financial mismanagement.
Postmaster General David Steiner warned a House Oversight Committee that USPS is in a financial crisis. Within a year, USPS is projected to run out of cash to pay its workers and vendors.
“I am not sure that the American public is aware that the Postal Service is at a critical juncture,” Steiner said to NPR in March. “I know that I wasn’t aware of the extent of it before I took on this role, but at our current run rate and if we continue to pay our required obligations in the same manner as we have done in recent years, then we will be out of cash in less than 12 months.”
I have loosely kept up with the state of the postal service as the American Postal Workers’ Union has fought for fair labor contracts. These issues have long been present and are well documented.
The financial issues USPS faces stem from the Postal Reorganization Act of 1970, which requires USPS to be largely self-sustaining, and its reliance on the monopoly it holds over letter deliveries.
In a world of privatized delivery companies like Amazon, FedEx and the United Parcel Service, along with most communication moving online, this financial model is causing USPS to bleed money.
The act creates barriers for USPS to access more funding from taxpayers. Letter delivery decreasing over time removed USPS’s monopoly value over letter delivery.
The success of privatized delivery companies has led many to argue that USPS should adopt a similar structure to remedy the issues it faces.
But, privatizing USPS ignores its value as a public service, not a profit-driven entity aiming to increase shareholder value.
Steiner’s comments are not completely without merit, but his time on FedEx’s board of from 2009 to 2025 raises questions about his impartiality. Someone with Steiner’s past suggesting a fix to USPS’s problems feels like a wolf shepherding a flock of sheep.
As I said above, privatizing the postal service would shift the focus to its priorities. Steiner’s main request to Congress is to raise the amount of debt that USPS can take on, which currently sits at $15 billion.
To use Steiner’s former employer as an example, FedEx’s debt currently sits around $42 billion. If that were to increase and become unsustainable, FedEx has options not available to the USPS, such as seeking more investment.
It may sound like I just made a great argument for why the USPS should do this, but only if you ignore this model’s main priority of continuous financial growth to please shareholders.
Currently, the USPS operates on a universal service obligation to provide every address in the U.S. with mail services. Private companies can choose not to serve rural areas that depend on mail services if it negatively affects shareholder value.
The universality allows for necessary goods like medicine to be accessible, especially for people in rural communities. Veterans get 84% of their medications through the mail, and one-fourth of them live in rural areas.
Research from the Brookings Institution shows rural communities with a post office see greater economic benefits than those without. If USPS is privatized, it could create higher costs to service these areas, which would harm people who need those services.
Private delivery companies implement area surcharges to 62% of U.S. zip codes, as well as other additional fees that are piled on.
Privatization also negatively affects workers, as research has shown that increasing concentrated ownership through investments negatively impacts the employment and wages of workers.
Postal workers often secure better wages thanks to fewer de-unionization effects than exist in the private sector. 38.7% of private sector workers with bachelor’s degrees earn under $15 an hour, as opposed to 8.9% for postal workers.
I can understand the desire to make services more efficient and attempt to reduce costs at a time when the Postal Service is struggling to handle its finances. However, these efforts have to place the USPS as public service first and foremost.
It is tempting to think that profitability would allow the USPS to remedy its issues and possibly grow. I do not believe this outcome is realistic. It would simply increase the cost of a necessary service that most Americans rely on and view favorably.
It may be shocking to hear, but some things provide societal value regardless of whether they make money from their services.
