The United States Post Office has proposed yet another rate increase to the cost of traditional mail. The Post Office is seeking to increase the cost of stamps by 2 cents to 46 cents per stamp. If approved, it would be the seventh cost increase since 2000.
Postmaster General John Potter says that the price hikes are necessary for the U.S. Post Office to stay in business. The change in price is not final until the independent Postal Regulatory Commission approves the request. They have 90 days to consider the request, and if approved, the price change will go into effect on January 2, 2011.
Last year, the Post Office lost an estimated $3.8 billion in revenue, despite raising rates and cutting 40,000 full time jobs. There are many reasons for this. In the weak economy, businesses are cutting back on advertising through traditional mail, and many consumers would rather send free e-mails for communication and bill paying rather than go to the Post Office and pay.
Sarah Bonner, a senior Graphic Design major, agrees that electronic mail has had an impact on the postal service.
“I guess it’s because so many people are using e-mail,” said Bonner. “My parents told me that back in the 1970’s a stamp cost like 20 cents, and it was a pretty big deal the first time they tried to raise the price. In the last 30 years it has quadrupled, while before that it took 100 years for the price to double from 3 cents to 6 cents.”
Sam McDonald, a business owner in the Sylva area, said the increase will only hurt him.
“My company has to mail out paper bills and other paperwork to our clients, so when the cost of a stamp increases, our bottom line suffers,” said McDonald. “I understand that the postal service has to raise prices because a lot of people are using e-mail and other means of electronic communication, but I wish they would give businesses a break.”
The cost of mailing a letter has been slowly increasing as the U.S. dollar experiences inflation. In 1985, individual stamps cost 22 cents. In 25 years the cost of stamps has doubled, yet at the same time the Post Office is in serious danger of going bankrupt.
The Post Office predicts it will lose $7 billion next year. In addition to the stamp price increases, the Post Office has other ideas to save money. The Post Office is seeking approval to eliminate Saturday delivery. Getting rid of Saturday delivery service would require the approval of Congress. Also, the Post Office is considering raising rates for extra weight. Under the new proposal, customers would pay 46 cents to mail letter weighing an ounce, and the cost of each additional ounce would go up a penny to 18 cents. The cost of mailing a postcard would jump 2 cents to 30 cents per postcard, and the cost of mailing a periodical would go up 8%.
The independent Postal Regulatory Commission has until the first week of October to approve or reject the proposals.