July 17, 2011
The decision to reorganize the Postal Service’s network and close thousands of post offices—16,000 of them over the next six years, according to the Postmaster General—is based on dozens of “retail optimization” studies done over the past few years. There’s no shortage of numbers demonstrating why it’s good business for the Postal Service to do retail out of supermarkets, Office Depots, and kiosks instead of old-fashioned post offices.
The math deployed by the Postal Service and its consultants can be quite impressive. In one study called "The Postal Service Retail Facility Location and Size Problem" (pdf here) by Anthony M. Yezer, Professor of Economics at George Washington University, there's a whole slew of numbers and equations, like this one:
That's a lot of brain power to justify closing a small rural post office. But the logic is cruel, the math is fuzzy, and the numbers don’t add up.
Just consider the way the Postal Service calculates how much money a particular post office is making or losing. Most postal revenue comes from commercial mail, and all this revenue is credited to the place where it enters the system, usually a large urban facility. The post office that bears the cost burden of delivering this mail gets none of the revenue. That’s why nearly every post office looks like it’s losing money—nine out of ten, according to what the Postal Service recently told the Postal Regulatory Commission. The only ones that are profitable are those that get income from the big mailers.
Consider, too, how much it costs to operate a post office and to rent or own the space. The ten thousand smallest post offices represent less than one percent of the USPS budget of nearly $70 billion a year. And closing 16,000 of the most "under-performing" post offices—half the post offices in the country—would save less than two percent of the USPS budget.
But it gets worse. What the Postal Service saves by closing post offices comes at the expense of the people it’s supposed to be serving. Take the case of Etna, New York.
Etna is located in Tompkins County, in the “dark forest” of the southern Finger Lakes region, a great vacation spot and home to Cornell University and Ithaca College. Many of the towns and villages in the area have names like Ithaca, Homer, Hector, and Ulysses because the surveyor’s clerk had a fondness for Greek and Roman history, and there was a classical ferver going around, as evidenced by early nineteenth-century architecture—all part of the desire to associate post-War of Independence America with ancient Greek democracy.
Named after Mount Etna in Sicily, the town got its first post office on January 16, 1823. The first postmaster was Henry B. Weaver, and over the next 182 years, a succession of fifteen postmasters would serve the people of Etna. A year ago, postmaster Barbara J. Van Dusen resigned. She may be the last of the Etna postmasters. The Postal Service never replaced her, and for the past year, the post office has been run by an officer-in-charge. Now the Postal Service is using the absence of a postmaster as a reason for closing the post office.
In May the Postal Service held a meeting at Houtz Hall, the community center where the Postal Service rents space for the post office, to hear comments from the town’s citizens about the impending closure. The Postal Service scheduled the meeting for 10 a.m. on a Thursday morning, when most people are at work. As the Cortland Standard reported, about twenty people attended, and it doesn’t sound like they were very happy. They didn’t like the idea of mailboxes—the snow plows knock them down—or cluster boxes either—they freeze up—and neither has the security of a post office. And they didn’t like the idea of driving three miles to the next-nearest post office in Freeville. And they didn’t like losing a place that’s been there for their whole lives, a place many can walk to, a place where they chat with neighbors, a place that helps give identity to the town.