Privatization is a systemic problem, by which is meant that changing elements of our society, i.e. regulating privatization, won’t help. As public services are privatized, the price of those services rises, and profits rise as enterprise capital is liquidated and real wages are cut. Privatization has become a proven method for making executive compensation go through the roof while public schools are closed, affordable housing is gentrified, and health insurance claims are denied. The scions of the 1% are infecting the vital organs of society and appropriating their nutrients. Communities are facing the choice of either putting up public capital as collateral for loans needed if they’re going to continue to provide services, or eliminating those services. As these choices are made, resistance to privatization depletes.
One public enterprise that has done an exemplary job of resisting privatization is the post office. This is because the USPS operates on a principal that all essential public services should follow: that of extending service universally so that everyone can use it and everyone can afford it. This is called the Universal Service Obligation. Instead of diverting profits to executive compensation packages and shareholder dividends, those profits have been used to extend mail service everywhere and to keep the price of postage stamps low.
Until 1980, the USPS received revenue enhancements for building new post offices to serve a growing population. In addition, the real cost of a first-class postage stamp decreased. But in 1970, Congress and President Richard Nixon lashed back at postal workers in retaliation for the Great Postal Strike of that same year with the Postal Reorganization Act. When Nixon signed the act into law he declared that henceforth the USPS should “run like a business” and that revenue enhancements would be reduced to zero by 1976. Minor supplements were paid for four years afterward but stopped altogether in 1980. It is the only agency of the US Government that has to raise all of its operating expenses. Nevertheless, with modest increases in postage fees and by consolidating operations, the post office continued to thrive without assistance. Then, in 2006, the Postal Accountability Enhancement Act imposed a crushing burden on the Postal Service’s financial condition. (See below.) Since that time, USPS ledgers have been red and they’ve had to liquidate their capital to pay the tribute. To streamline this liquidation, in 2011 the Postal Service’s Board of Governors signed a contract with CBRE, the world’s largest commercial real estate agency, to act as agent in the sale of all USPS properties. It can be easily imagined that this is a sweet deal for CBRE, but here are some details to make its import more explicit:
· There are between thirty-five and forty thousand USPS building and land-parcel units in the nation. (That number has declined 17% in the last forty years, even as the population has increased more than 50% in the same period.)
· Currently there are more than sixty buildings for sale – ranging in price from a high of $9 million for the Western Ave. post office in Los Angeles to $40 thousand for one in Detroit. There are also eleven USPS land parcels for sale, ranging in price from more than $3 million in Austin, TX to $13,500 in upstate NY.
· CBRE could collect, conservatively, between $2-3 billion if all USPS real estate were sold.
If US highways were no longer needed for commerce and industry, it’s a good bet they’d be allowed to crumble. The USPS is experiencing a similar rejection by capitalist enterprise. But even if we don’t need the mail service to conduct business (and we believe small businesses do need it for advertising, contracting, and invoicing), here are several reasons to sustain it:
· The USPS is a model of self-sufficiency. Since government funding of the post office was eliminated during the Nixon administration (making it one of only two postal services in the world that isn’t underwritten by government revenue – the other being Somalia’s), the USPS has continued to do its work efficiently. At the same time, it has not pursued unsustainable profits, preferring stability and affordability over expansion, in adherence to the universal service principle. Only during this decade of crisis when they are compelled to make unreasonable contributions to the Postal Service Retiree’s Health Benefit Fund (PSRHB) have they experienced dangerous shortfalls in revenue. When the period of PSRHB contributions has passed in 2016, the USPS will be able to get back in the black – that is, if it hasn’t had to liquidate too much of it’s infrastructure.
· To send a single letter costs $0.46. To send a single email requires paying a minimum monthly fee to an interned service provider of more than $30.00 or making a trip to an ephemeral library. Thirty bucks buys a lot of stamps. Without email, a person might have to spend no more than $5.00 for bill payments and other correspondence.
· Digital communication is monitored. Google and Twitter are surrendering users’ private information to government authorities and corporate high-bidders. (On Thursday, May 2, NYC Police Chief Ray Kelly said that the Boston Marathon bombing means privacy has been “taken off the table.” “The FBI wants to make it mandatory for websites like Google and Facebook to have backdoors installed in their software.” (Newsforage.com 4/30/2013) Also, see this article in “Wired” 4/29/2013: http://www.wired.com/threatlevel/2013/04/fines-wiretap-noncompliance/. Also, from thehill.com 4/10/2013: “The Internal Revenue Service (IRS) has claimed that agents do not need warrants to read people’s emails, text messages and other private electronic communications, according to internal agency documents.”) Hand-mailed letters are alternatives because surveillance of hard correspondence must be done by people selecting and reading letters from and to already identified targets. The ease with which email can be scanned makes it much more dangerous to use for private communication.
· If postal service becomes the product of privately owned corporations, we should anticipate some or all of the following changes:
o Cost increases for sending letters. Corporate mail services may be regional, so sending mail outside the region will carry a reprocessing cost.
o Even if mail is sent within a single carrier’s region, little – if any – effective recourse will be available for letters and packages tampered with in transit, unless the customer has enough money to pursue a dispute.
o Subscription fees for receiving mail. Areas with high volumes of subscribers may have lower subscription fees.
o Those without subscriptions and those living in rural areas will likely have to travel to collect their mail. Those living in low-income urban areas may have to travel across town. Those in isolated regions may have to travel over 50 miles to pick up their mail. Among other things, this means that seniors, disabled persons, the unemployed, and families in critical financial need will have to travel and wait in lines every month to receive government entitlements.
o Overland mail service will not be viewed as a growing industry. The principle of making it available to everyone will be abandoned, putting pressure on us to rely on digital communication exclusively, which is easily scanned and altered.
Debt – being the seizure of assets and future labor – is the primary mechanism of privatization. Free market advocates claim that public service providers – whether they’re funded or merely sanctioned, as is the case with the USPS – are wasteful and that competition and corporate accountability compel efficiency. This flaccid argument veils the costs of privatization - if FedEx and UPS control the distribution channel for mailing ANYTHING, what will be the true cost to society? More unions will be dismantled and more good jobs with decent pay and benefits will be replaced by low-wage, part-time jobs with little or no health-care. The post office has proved itself to be a glaring exception to the principle of competitive efficiency; so, capitalists in collaboration with politicians have created an exceptional condition with the intention of destroying organized labor and making the USPS fail. This exception is an unprecedented requirement in the 2006 Postal Accountability Enhancement Act that the USPS pay $56 billion over ten years into the Postal Service Retirees Health Benefit fund. No other enterprise, public or private, is required to cover medical costs for retirees seventy-five years in advance as the USPS must do by 2017. This payment mandate is driving an otherwise profitable public enterprise into bankruptcy. Services are being considered for elimination and post offices, which are public assets, are being sold off in an attempt to make up the lost revenue. If this continues, the USPS will lose customers and find itself with insufficient funds to continue service sometime in the next four years. (NALC President Fredric Rolando on 4/17/2013 warned the House Oversight and Government Reform Committee that “on the merits, eliminating Saturday delivery would be a costly mistake that would not only make it harder for the Postal Service to grow the business but also would cost money by driving away customers.” A “shrink-to-survive strategy” surely would be a way to move the USPS into the terminal ward.)
We should oppose privatization because publicly accountable enterprises resist exploitation better than those that serve the interests of the 1%. Also, the tactics of creating financial hardship, which creates the need to borrow money with any premium attached, are experienced by most of us. All kinds of services, most notably health care, education, and housing are more expensive than we can afford; and the reason for this is the greed of those at the apex of the capitalist system with the help of legions of lawyers and lobbyists. These services should be controlled by a universal service obligation similar to that of the post office. But now it’s clear that these same highwaymen intend to destroy the security of overland communication. If we don’t prevent this from happening, then the best model of public efficiency will disappear. Other essential services could be run sufficiently if they could emulate the post office rather than Wall St.
Can reform legislation created by Congress and signed by the President save the USPS? Given that privatization is a top priority for capitalist entrepreneurs, and given the growing dominance of their lobbying apparatus, it seems unlikely that any of the reasons we’ve listed above for saving the post office will influence the votes of enough of our elected representatives. Consider the recent failure of a bill requiring registration of gun ownership despite near-unanimous popular support. It was the NRA, representing the interests of weapon and ammo manufacturers who blocked the democratic process in that instance.
We have two strategies to offer for saving the USPS:
· Pressure local politicians to resist privatization. Explain to city council members, mayors, and state assembly persons that privatization of the postal service will result in the loss of affordable advertising opportunities for small businesses. As their advertising costs go up, either their prices will rise as well, or the quality of their products will go down, or both. Also, the waiting period for USPS workers to become Fed Ex or Office Depot or Burger King employees will go along with municipal and county revenue losses. Local jurisdictions will either have to borrow to continue providing essential services or trim their budgets.
· Encourage the members of the postal workers’ unions to more loudly oppose the “shrink-to-survive” strategies of the USPS Board of Governors. Unions are organizations for collective action – engines of resistance to privatization. We should encourage them to block further payments to the PSRHB and support them in resisting government reprisals.
o There should be an open discussion between the postal unions and the grass roots people whose support they need. They have health benefits and pensions that they’re fighting to save. The rest of us are fighting to get those securities, so why should we care about workers with great jobs and discounts on See’s Candy? The unions should make the case that they are fighting for more than their own jobs. They’re fighting to defend collective bargaining on the Federal level. This situation is Wisconsin gone national. The Civil Service Agency is under threat.
· Occupy post offices and block their sale.
· Strike Debt is beginning to develop a plan to open check cashing outlets that charge a minimal fee for the service in order to undermine the profitability of corporate outlets providing the same service with high fees. The low fees we would charge would be used to cover the rental costs for secure locations, equipment rental and payment if necessary for check validation fees and software.
Ultimately, we believe the best locations would be inside post offices, in conjunction with a public banking facility. Since Post Offices are ubiquitous, our check cashing outlets could be located in communities where they are most needed, i.e. in low-income areas where there a few – if any – banks. To advance this plan, we will need the input and support of those who oppose the exploitation of corporate banks.
· The USPS can continue to run efficiently without the government’s monopoly protection. Private carriers may compete for USPS customers, but they’ll have to establish extensive new distribution systems to combat a huge carrier whose network is already well-established.
· Without the burden of the unprecedented payment mandate, their accounts will turn from red to black. With the restitution of the $34 billion already paid into the PSRHB fund since 2007 they will be able to easily pay off their outstanding loans (under $200 million), hold postage fees at current levels, continue six-day service, keep post offices open, and continue to provide the excellent employment opportunities that they have done for generations.
Keeping the USPS in tact can take the struggle to resist privatization to the next higher quantum level and turn the tide against the metastasis of capitalist concentration. While many worker-owned companies and co-ops currently make priorities of fair distribution of wages, and of transparency and accountability, none of them are among the largest employers in the world. With or without government protection, the USPS can remain a truly public entity.