Postage rates go up:
A new subsidy to business

Jul 1, 2002

On June 30 postage rates went up. It now costs 37¢ to mail a letter instead of 34¢. The Post Office cites its 1.2 billion dollar loss last year, subsidized by the taxpayers, as the reason for the rate increase. It’s true that there is a postal subsidy, but it goes to the business mailers, not those of us who have to pay our bills with first class stamps. And we pay it – both through our taxes and when we pay for stamps.

Under the new postal rates, for example, a company pays only 18¢ to mail a business letter weighing almost three and a half ounces. If we mail a letter weighing the same amount, we pay $1.06!

So-called standard mail, which businesses use when they make bulk mailings and sort the letters by zip codes, last year averaged 9¢ an ounce, while the first ounce of the mail we sent cost 34¢. If companies had to pay an additional 25¢ an ounce it would bring in 43 billion dollars more – 35 times the 1.2 billion dollar deficit.

Business, of course, says that it pre-sorts its mail. OK, even if it paid a reduced rate, there would be enough additional income to the Post Office to not only eliminate the 1.2 billion dollar deficit, but to greatly improve service. More workers could be hired, thus shortening lines in local post offices.

The Post Office is part of the United States government, which says it is running it like a business. To be more exact, the government runs the Post Office FOR business.