Who gets hurt when the post office closes?
September 14, 2011
One of the main problems with closing thousands of post offices is that the cost and pain are not evenly distributed among the population of the country. Some people get hurt more than others. As with most government cutbacks, it’s the poor who get hurt the most. They’re the ones who live in low-income urban neighborhoods and hardscrabble rural areas where most of the closings are taking place.
While a few affluent communities may lose their post offices, they represent a small percentage of the total slated for closure, and when the well-to-do lose a post office, it’s not such a hardship — they’ve got the time and gas money to drive a few miles to another post office in their nice car.
But it’s not just the poor who get hurt. Think about all the middle-class people who own small businesses that depend on the post office, the retired seniors who walk to a post office, the people of all incomes who look to the post office as a source of community identity and social fabric, and all the postal workers who will be out of a job.
Let's think a little more about who suffers when thousands of post offices close. The Postal Service certainly doesn't seem to be thinking about it.
People without Internet
All you hear from the media is that the Postal Service is closing post offices because everyone is doing email and paying bills online. But it’s not everyone.
According to the US Census for 2010, 31% of U.S. households have incomes of less than $30,000 a year. And according to Pew Internet, 60% of these households do not have broadband at home, and almost half don’t use the Internet at all. That means 19% of the country’s households do not have home access to the Internet because they cannot afford it or because they live in a low-income or rural area where there’s no broadband available. That number may actually be larger, since a third of the households earning $30,000 to $50,000 don’t have home broadband either.
That 19% means over 22 million households don’t have home Internet. If the Postal Service closes 4,000 post offices — one out of eight — how many of those 22 million households will find themselves without a nearby post office and without Internet? Given that many of the post offices on the list are in low-density areas, let’s just say one out of twenty. So we’re talking about over a million households near or below the poverty level ($22,000 for a family of four) with no Internet and no local post office. Those are some of the people who will be hurt most by the closing of thousands of post offices.
Poor people without Internet can’t just go online for email, bill paying, and news. These are the people who go to the post office to buy a money order to pay the electric bill. These are the people who will feel it the most when they have to put some extra gas in the tank to drive to a post office three or five or ten miles away, or who have to take an extra bus ride across town to the post office that’s still open. These are the people who experience the post office as a real place in the real world, not just an abstraction they read about in the virtual world of Internet news.
The Postal Service has not broken down its lists of post offices being studied for closure in terms of population density. In fact, it says it’s not looking at census data as a criterion — it doesn’t want to consider whether the area served by a post office is low-income, has a higher-than-average minority or senior population, or anything else that might suggest the Postal Service is discriminating against a particular part of the population. It says the relevancy of such data is too hard to determine, since no can know how many people in each census group are using the post office, and in what ways.
Nonetheless, even a cursory look at the closing maps and news items about impending closures reveals that a large portion of the post offices slated for closure are in rural areas. Three thousand of the 3,650 on the Retail Access Optimization Initiative (RAOI) closing list have annual revenues of less than $27,000, and almost all of these are probably rural. And there are also many small rural post offices on the non-RAOI list of 727 slated for closure.
Say 3,000 small rural post offices close, and say these post offices serve towns with an average population of a thousand people — about 400 households (the census says the average household is 2.6 people). When their post office closes, those 400 households will need to drive to a post office in another town. Since we’re talking rural, the nearest post office could easily be five, ten, or twenty miles away, but to be conservative, let’s say five. It’s hard to figure how often each household will need to go to the post office, and how many of those trips will be an extra trip as opposed to “we were going to Optimo anyway.” But let’s say that each household needs to make an extra ten-mile round trip twice a month.
If you do the math, it comes to nearly 300 million miles, and $50 million in fuel costs — over $40 a year per household. In other words, the Postal Service, in its efforts to save $200 million, is just transferring a large portion of its cost savings to rural Americans, who are going to dig deeper into their wallets to buy gas.
Of course, extra driving time and fuel costs are just part of the impact of a post office closure on a small town. What hurts even more is the thing that can’t be quantified — the way a post office serves a social function in the community. It’s a social hub and a source of community pride and identity. That’s why in so many news reports about post office closings, the people in small towns say that if you close the post office, you’re putting a nail in the coffin of the town. And they mourn the loss of the post office as if were a member of the family.
Many of the post offices slated for closure are in low-income urban neighborhoods, like the Bronx and Harlem and the west side of Chicago. Many of these people use the post office as their bank. It’s not unusual. According to a report commissioned by the Postal Regulatory Commission (PRC), about 9 million households are “unbanked” (no bank account), and these people have little choice but to buy money orders at the post office to pay the rent and utility bills. Another 21 million are “underbanked” — they have a bank but still use the post office for things like international money orders to send money to relatives in other countries. “A disproportionately large number of these households,” the report notes, “are minority and low income.”
As this story about post office closings in the Bronx reports, many people depend on the post office for money orders because the landlord or utility company won’t accept money orders purchased elsewhere. And of course, people use the post office for many things besides money orders, and when a post office in a place like the Bronx closes, patrons are going to have to take extra time and pay for an extra trip on the subway or bus to go to another post office.
A post office closing doesn’t just affect the patrons of the post office. There are always several small businesses that benefit from being next door or across the street from a post office — restaurants, stationary stores, print & copy shops, and other retail stores that bring in income thanks to the people coming and going to the post office. That’s why chambers-of-commerce and local business people are among the most vocal when it comes to protesting that a post office may close. The amount of lost revenue is impossible to calculate, but for every one of those 4,300 post offices that might close, if, say, four businesses lose a couple of thousand dollars in annual income, we’d be talking about $35 million a year. As with the cost of gas being passed on to patrons, that’s money the Postal Service may be saving but that local businesses will be losing.
The Postal Service has been telling us that closing post offices will be good for small businesses since many of them — as many as 2,000 — could become home to a “village post office” and thereby pick up some extra revenue. But the amount of revenue a business is likely to gain from taking on postal business is very small — the first Village Post Office in Malone, Washington, is reportedly getting $2000 a year from the Postal Service. Plus, the number of small businesses likely to benefit as VPOs is tiny compared to how many might be hurt.
It’s not just the pizza joint across the street from the post office that’s going to suffer when the p.o. closes. There are thousands and thousands of small businesses that depend on their local post office to handle lots of daily mail, incoming and outgoing. Consider, for example, all the small businesses that depend on EBay. Last week when the Postal Service “crisis” was front-page news, EBay shares dropped more than six percent “on concern the company may be among the most exposed e-commerce players affected by the massive post office closures at the U.S. Postal Service.”
It’s mostly individuals and small businesses who depend on the Postal Service, since the big retailers, like Amazon.com, tend to use FedEx and UPS because they can negotiate discounts and their products tend to be expensive enough to merit the higher prices of the private sector shippers. It’s the small and medium-sized online sellers who will be hurt most if thousands of post offices close. They’re the ones who are going to have to take more time and spend more money driving back and forth to a post office in another town. So again, what’s good for the Postal Service isn’t so good for the small businesses that provide so much of the Postal Service’s parcel business, which is actually doing pretty good right now in spite of the laggard economy — first-class parcels were up 9.7% and standard parcels were up 6.7% in the third quarter of fiscal year 2011.
People who walk to the post office
This may not seem like a very large portion of the population, but these people will be seriously hurt. We’re talking about seniors and young people who can’t drive, people who live in small towns or low-income neighborhoods who don’t even own a car. People reading this article on their home computer may have a hard time relating to the fact that there are thousands and thousands of people who not only don’t have internet at home, they don’t have a car either, and they walk to their post office out of necessity. But if you read a few of the thousands of articles that have come out over the past few months telling stories about post office closings, you’ll hear plenty about how these people are going to be seriously impacted.
Victims of natural catastrophes and emergencies
In addition to its study on the "unbanked," the Postal Regulatory Commission commissioned a study entitled The Contribution of the Postal Service in National Emergencies. It discusses how the “massive infrastructure" of the Postal Service "is a unique federal asset that can be called upon during a major disaster or terrorist attack when power and phone lines are useless.” As an illustration, the study examined how postal workers came to the rescue when Katrina hit the Gulf “to reestablish communications, to reopen lines of commerce, and to deliver government information, relief checks, and medicine to hurricane victims living in makeshift shelters.” The federal government has assigned the Postal Service special responsibilities to prepare for emergencies, and were one to occur — such as a biological attack — communities who’ve lost their post office will lose out again, and in the most serious ways imaginable.
Postal workers and their families
The Postal Service has indicated that as many as 5,000 postal employees will lose their jobs if 3,700 post offices close. It could be more, since that number doesn’t include the 727 post offices on the non-RAOI list. According to Dean Granholm, vice president of delivery and post office operations, the 5,000 breaks down to about 3,000 postmasters, 500 supervisors, and another 500 to 1,000 clerks (CNN Money).
That may seem relatively minor in the context of the 120,000 postal workers who might get laid off if the Postmaster General convinces Congress to remove the no-layoff clause from union contracts. But if you’re one of those 5,000 workers who lose their job, it won’t seem relatively minor at all. And the big layoffs are still only a maybe — the post office closings are happening right now.
If you’re not a postal worker and your own post office is not on one of the hit lists, you may feel that post office closings don't affect you personally, and if your experience of the post office is just about standing too long in line, you probably don’t care about what happens. But the two lists that the Postal Service is working on right now are only the beginning — the Postmaster General says he plans to close half the country’s post offices over the next six years, and by that time, there will be even more postal counters in Wal-Mart and the supermarket, so he won’t stop there. If your post office isn’t on the list right now, it will be on the next one or the one after that. So every person in the country needs to imagine life without the post office, period.
For many people, that may not mean much — they live on their computers, and they don’t have to worry about how to pay a bill using money orders or how to communicate with friends who don’t have email. But "you don’t know what you’ve got till it’s gone," and when there are no more post offices, people will come to realize the important role they play in our lives.
Post offices serve as a community anchor and hub, they give a place an identity, they support small businesses by providing easy access and low mailing costs, they bring foot-traffic into nearby stores and restaurants, they save countless miles of driving time and fuel by serving as nodes on a vast network, they provide services that no Wal-Mart postal counter can do (like passports and emergency preparedness), they are often housed in beautiful historic buildings that are a source of local pride, and they represent the presence of the federal government in every community and remind people that the government is capable of doing some things right.
It may sound like an empty cliché at this point, but the Postal Service really does “bind the nation together,” and it’s not just postal workers who do this. The post offices themselves play a key role in holding everything together. The postal system won’t work with just a couple of hundred large processing facilities and a hundred thousand postal counters in big box stores and supermarkets. The country needs its post offices. But it looks like we’re not going to understand why until it’s too late.