NCPA - National Center for Policy Analysis

Postal Rates Grow Faster Than Inflation

January 18, 2000

The U.S. Postal Service has announced that a first-class stamp will likely go up by a penny -- to 34 cents -- before the end of this year. While that may not seem like much, it will gather in another $1 billion for the organization.

As every American knows, postal rates have a habit of going up every several years.

  • If mail costs had risen just at the rate of inflation since 1960, a first class stamp would cost about 26 cents.
  • Since 1960, when a stamp cost only 4 cents, there have been 12 rate increases.
  • And those who can remember when mail was delivered twice a day can attest that service has suffered.
  • Experts estimate that the U.S. Postal Service monopoly costs American consumers between $5 billion and $10 billion a year -- as a result of higher costs and slower service.

Laws called the Private Express Statutes declare that no private entity is allowed to deliver a package or envelope for less than $3 or twice the cost of a first class letter.

Critics have long urged that these laws be abolished -- arguing that private alternatives such as Federal Express and UPS already exist, not to mention e-mail. Abolishing the U.S. Postal Service either by fiat or competition, they say, could not help but improve delivery services at lower costs.

Source: Stephen Moore (Cato Institute), "Cancel Snail Mail?" Washington Times, January 18, 2000.


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