Public perception and the Postal Service

6 Feb

I don’t know if this is at all interesting to anyone but it’s something I was thinking about today.

1983

This post will feature pictures of stamps featuring bridges

Today’s big news is that the US Postal Service is ending Saturday delivery. The goal of this is to save money. The Post Office has a huge budget problem. The problem stems from two things: decreasing revenue, and increased overhead costs. Some people would say that the latter problem only exists because of peculiar accounting rules that the government makes the Post Office use, but that’s a political argument and I don’t know very much about it and even if I did I’m not interested in writing about politics.

Everyone says that there’s less mail now than there used to be. That seems crazy to me. I get mail constantly. Everyone does. At least everyone who I have ever shared a mailbox with. I think the biggest problem is that most mail used to be first class letters with first class stamps, and now most mail is junk with bulk rate postage. I have no data to support this assertion.

iu

A related news item about the US Postal Service is that postage rates just increased. First class stamps now cost $0.46. For my entire life people have complained about the cost of stamps. This seems like the dumbest thing in the world to me.

First, a little bit of math. I was born in 1983. The price of a stamp then was $0.20. So, since then the price of stamps has increased by 230%. In 1983, The Consumer Price Index was 99.6. In 2012 it was 229.594. Since 1983 it has increased by 230.516064257%. You might notice that the price of stamps has increased almost exactly as much as the price of everything else in the last 29 years.

That last paragraph should be enough to demonstrate that anyone complaining that stamps are expensive is an idiot. But I’m going to keep writing. I have two questions: Why do people complain about the price of stamps, and are stamps actually expensive?

United-stamp2066train-bridge

I think idiots complain about stamps instead of milk or toothpaste or whatever other consumer good because it’s easy. There’s one universal price for stamps. Everyone knows what it is. And since it doesn’t fluctuate like other prices, it’s easy to remember what the old prices were.

Digression: The other price that people constantly complain about is gas. I think a big part of that is that giant signs advertising its price everywhere, which makes people remember how much it used to cost more so that other goods.

777_001
The second question is more interesting. Are stamps expensive? I don’t think so at all. For 46 cents you can have a document hand-delivered anywhere in the United States. Depending on the distance involved, it takes two to four days. This service is incredibly, almost unbelievably, reliable. To me that’s a bargain. I think the Post Office essentially has a large public relations problem. I think that a big part of the problem is that everyone assumes stamps are overpriced because dumb people are always unwarrantedly complaining about it. This problem gets worse every year because the Post Office keeps raising prices. Just like every other business. This creates a terrible feedback loop. People complain about stamps being expensive for some reason. This is common enough that most people agree with the proposition. Then everyone feels like they’re being ripped off by the Post Office. Then the USPS raises stamp prices, and people feel even more aggrieved, since they thought the old price was already too high.

stamp3
This is all a good MBA case study. I should be a business professor.

The other problem the USPS has is a terrible reputation for customer service and reliability. People always joke about things being lost in the mail or damaged in transit or whatever. Just look at Newman on Seinfeld, for example. I don’t know why this is the case. The Post Office truly does have a huge problem with in-person customer service at the physical Post Office, but I don’t know why that reputation extends to mail delivery. I can honestly not remember a single instance of anything that I’ve ever mailed or had mailed to me being lost or damaged en route. I think this falls under the same category as stamp prices. People joke and complain about it so everyone assumes it’s true, even if they don’t have any actual evidence for it.

If I were the Postmaster General, I would raise the price of a stamp to $1. This seems to me like an eminently reasonable price. Erase your conception of historical stamp prices and think about it. You can have a document hand-delivered pretty rapidly anywhere in the US. For $1. If no one had an idea in their head of how much a stamp “should” cost, I don’t think anyone would bat an eye at paying a dollar to mail a letter. Then I guess I would do some MBA stuff. Advertising to change public perception or whatever. That doesn’t really interest me though. I just wanted to float my stamp proposal.

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One Response to “Public perception and the Postal Service”

  1. Vito February 7, 2013 at 6:10 am #

    Here is the biggest difference between how the post office reports it’s finances versus many other government organizations do. The post office is forced to recognize the debt service (i.e. interest paid) on it’s accumulated debt as an operating income/(loss). The post master general has claimed this week that if it weren’t for the $15 billion debt, the USPS would be solvent. But therein lies the problem, wouldn’t we all like to say “Gee, if i didn’t have to pay back what I’ve borrowed, I’d always make money.”

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