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Strange Bedfellows
Burrus Update #07-07, March 1, 2007
I rarely agree with the Institute for Research on the Economics of Taxation (IRET), a conservative think tank, but a congressional briefing paper the organization published Feb. 15 is an exception.
The article, Does the Growing Number of Homes and Businesses Help or Hurt the Postal Service? (Advisory No. 219) [PDF], explodes the myth advanced by advocates of postal “reform” that yearly increases in the number of delivery points impose a crushing financial burden on the United States Postal Service. In a consistent and systematic way, author Michael Schuyler analyzes the economics of costs and revenues as applied to new deliveries.
“Delivering mail to an increasing number of homes and businesses is not the devastating cost burden the Service often claims,” he concludes. “Most private-sector businesses would be delighted to be able to count on a steady, moderate increase in customers year after year.”
I suspect that if the author analyzed the postal collective bargaining process, we would strongly disagree. Conservative supporters of capitalism and democracy often pay only lip service to the subject of collective bargaining. While they chastise developing countries for failing to grant workers’ rights, they oppose every American initiative to level the playing field.
In the congressional briefing paper, for example, Mr. Schuler could not resist adhering to IRET’s right-wing, anti-union philosophy, opining that the efforts of postal reform advocates would better be directed at “the agency’s genuine challenges and opportunities, such as congressional restrictions that limit its ability to control its labor costs.”
But on the principal subject of IRET’s Advisory No. 219, we are completely in sync. We agree that the hype about delivery-point growth was merely a talking point for the advocates of postal reform; like many of the other myths advanced in that effort, the “burden” of new customers has no foundation in economic analysis or good business practice.
Let the trumpets sound and the drums roll: The American Postal Workers Union and the IRET Congressional Advisory agree.
William Burrus
President
