Postmaster General Patrick Donahoe surprised the nation last week when he announced that the U.S. Postal Service would end Saturday letter delivery starting in August. While reductions in service are never popular, this move could end up saving taxpayers the most money for the least pain to customers, according to our new analysis.
- An unprecedented and continuing plunge in mail demand began in 2007, causing multibillion dollar losses in every year over the period, two defaults to the U.S. Treasury totaling $11.1 billion in 2012, and the maxing out of its $15 billion government credit line.
- In public opinion surveys, two-thirds or more of respondents regularly say they would be willing to end Saturday delivery to avoid a price hike, and in a Rasmussen survey last year, 75 percent opposed retaining Saturday delivery if it would require government subsidies.
- USPS expects that axing Saturday delivery will eventually save $2 billion annually, primarily because fewer mail carriers would be needed if a day of letter delivery is eliminated. Most of the workforce reduction would likely be accomplished through attrition and buyouts.
- Many foreign posts, including those in Australia, Canada, Korea, the Philippines, and Sweden, are on a five-day-a-week delivery schedule. Singapore Post and a few others recently made the switch, and several, including New Zealand Post, are considering dropping six-day delivery.
- Several accommodations will ease the inconvenience for mail users: post offices now open on Saturdays will remain open on Saturdays; post office box service will continue on Saturdays; Express Mail deliveries will not be delayed; and packages will still be delivered on Saturdays.
Tax Foundation Fiscal Fact No. 360, “Saturday Mail Delivery Soon a Distant Memory?” by Dr. Michael Schuyler is available here.
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