Postage is going up again. You should be concerned about this, even if you don’t send mail.

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CNN
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On Sunday, the price of a stamp will increase for the second time this year, from 5 cents for first-class mail to 73 cents. You probably haven’t noticed.

And honestly, you might not care. But you should.

Most people don’t use mail the way they used to, if they send it at all. But the cost of mailing is a major issue for millions of businesses and organizations that spend most of the $40.8 billion a year on mail, including letters, bulk mail, junk mail and periodicals. And rising costs are forcing them to cut back, hurting the U.S. Postal Service’s budget and potentially its ability to continue providing essential services.

That includes everything from delivering online purchases to delivering lifesaving prescription drugs. And this year, tens of millions of voters will cast mail-in ballots in the presidential election. And, most importantly, businesses still rely on the mail to help them reach their customers and keep the economy going.

Postage rate increases used to be indexed to inflation, and were typically implemented only once a year. But Sunday will mark the sixth increase in three years, during which increases in first-class stamps have risen 10 percentage points faster than overall inflation.

Major mailers say a rapid price increase would drive them away from the Postal Service, eventually draining the agency’s budget.

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“We think they’ve gone overboard with their rate increases,” said Michael Plunkett, CEO of the Association for Postal Commerce, which represents mailing and shipping companies. “These rate increases don’t generate much additional revenue because they’re taking volume out of the system that’s probably never going to come back.”

The price of a first-class stamp hit 10 cents in 1974, just before the service’s bicentennial. In 2002, it was still at 34 cents, half the current price before Sunday’s increase.

If raising the price of stamps could endanger the Postal Service, why does the USPS continue to raise the cost of sending a letter? The short answer is that the agency needs the money — and urgently. The long answer is more complicated.

The Postal Service and the United States have been growing in tandem since before the country was even born – literally.

Founding Father Benjamin Franklin was appointed the first postmaster general in 1775, the USPS says on its website. The service grew to keep pace with the new nation and to help bind the young country together. That’s a big reason why roads were built between its early cities. U.S. Route 1, the first federal highway, began as the Boston Post Road to carry mail between New York and Boston, and it still bears that name in many places.

“When Alexis de Tocqueville visited the young country in 1831, the United States had twice as many post offices as Britain and five times as many as France,” Smithsonian Magazine noted in October 2020. Today, the company has 640,000 employees in more than 30,000 facilities across the country.

Postage stamps, however, took longer to arrive. “The City Despatch Post of Alexander M. Greig, a private carrier in the City of New York, issued the first adhesive stamps in the United States on February 1, 1842,” according to the Postal Service. Congress then authorized postage stamps in 1847, and prepaid postage was required in 1855. The iconic Pony Express—which features in many Western movies and novels—came along about five years later, in 1860.

The Postal Service has also made other appearances in popular culture and American history. The climax of the beloved Christmas movie “Miracle on 34th Street” (spoiler alert) The Postal Service comes to Santa’s rescue on Christmas Eve. The characters Cliff in the 1980s sitcom “Cheers” and Newman in the 1990s sitcom “Seinfeld” were mail carriers. The band The Postal Service was a turn-of-the-century indie pop darling. And the 1985 novel (by David Brin) and the 1997 film (starring Kevin Costner) “The Postman” highlight the importance of mail delivery in a dystopian sci-fi future.

But mail deliveries have declined with the introduction of new means of communication and connection.

Families and friends can communicate via email, text messages, and apps. Bills can be paid electronically. Physical mail no longer plays the same role in American life that it once did. For many, the individual letter is as relevant today as VHS movies, computer floppy disks, and audio cassettes. The nickname given to the traditional letter in the 20th century—snail mail—is hardly a compliment.

Over the past year, the service delivered 11.4 billion individual letters. That may sound like a lot, but it’s 75 percent less than it was 20 years ago. Even though the price of stamps has doubled in that time, most experts point the finger at technology.

“For most households, mail is not a major expense,” Plunkett said. “If a stamp cost a dollar, I would send out the same number of Christmas cards this year as I did last year.”

By contrast, online shopping has dramatically increased package deliveries. But the Postal Service doesn’t have the control over that market that it does with its mail service, said Kevin Kosar, a senior fellow at the American Enterprise Institute.

“Before digital came along, the Post Office had a very valuable monopoly. Those days are over,” he said. “The parcel business is booming, but it’s not a monopoly for them. It’s a very competitive business.”

But Plunkett and other critics worry that growth in the competitive parcel market will not produce the profits needed to offset declining mail volumes.

The big mailers have never liked the idea of ​​paying more for their postage. But they argue, with plenty of evidence to back it up, that such rapid rate increases drive away customers the service needs and worsen its economic situation.

“By raising rates, the Postal Service’s efficiency and productivity have declined dramatically,” said Art Sackler, executive director of the Coalition for a 21st Century Postal Service, another trade group representing businesses that use the service. “Last year, by its own measures, its efficiency fell to its lowest level in 60 years.”

Critics worry that the rate increase could cause the Postal Service to eventually run out of money, perhaps within a few years, and either begin relying on direct taxpayer subsidies from Congress that it does not currently receive or cut staff and services.

In 2021, the Postal Service, led by current Postmaster General Louis DeJoy, outlined a 10-year plan to modernize the service and reverse ongoing losses. Previously, he told the Senate in April, the USPS had been in a “financial death spiral” for years, but under the $40 billion modernization plan, “we are making the changes necessary to ensure that we are here to serve the country well into the future.”

But the plan, which includes restructuring its network of mail-processing facilities, hiring more full-time staff, improving transportation and delivery methods and investing in technology, has fallen short of its early promises.

The service had planned to break even by last fiscal year and post an annual profit of $1.7 billion this fiscal year. Instead, it lost $6 billion last year and is expected to lose another $6 billion or more this fiscal year, according to congressional testimony in April by Michael Kubayanda, chairman of the Postal Regulatory Commission, which sets rates.

Some unions representing postal workers fear the modernization plan will try to improve finances by reducing service reliability.

“The cost of a letter is still an issue,” said Mark Dimondstein, president of the American Postal Workers Union. “I think there’s good and bad in this plan. I think we have to adapt to a growing parcel market and a declining mail volume. What we’re concerned about in this 10-year plan is anything that slows down service.”

Kubayanda testified in April that he doubted the modernization plan would be able to meet its financial and service goals.

“It seems increasingly difficult to implement a universal postal system that reaches every American six days a week, at affordable prices, with reasonably fast and reliable service, and that is financially self-sustaining,” he said.