Privatization can be defined as the transferring of a business, agency, public service or property from the public/government sector, where the needs of the community are paramount, to the private/corporate sector, which exists solely for making a profit. This becomes a systemic problem when public welfare is falsely determined to be the outcome of corporate profitability. Those with money to invest look for the fastest return on their investments and neglect the long-term health of their communities. As public services are privatized, the price of those services increases, and profits multiply as enterprise capital is liquidated and real wages are cut. Privatization has made executive compensation go through the roof while public schools are shuttered, affordable housing is decimated, and health insurance claims are denied. The active agents of the 1% are infecting the vital organs of society and appropriating their nutrients. As communities are deprived of investment, they face two choices: either put up the community’s capital as loan collateral for continued public services, or lose the services altogether. Since the first choice is only a temporary solution, the second choice becomes inevitable, and the will to resist privatization weakens.
The USPS is a model for all essential public services
One public enterprise that has done an exemplary job of resisting privatization is the post office. This is because the USPS operates on a principle that all essential public services should follow: the Universal Service Obligation - to extend service so that everyone can use it and everyone can afford it. The cost of sending letters anywhere in the world is more affordable than any other means of communication because the USPS has adhered to its principle of Universal Service and spent profits on keeping prices low and extending mail service to remote and under-served areas rather than use those profits to pay high executive salaries and shareholders dividends.
Until 1980, the USPS received revenue enhancements for building new post offices to serve a growing population. In addition, the real cost of a first-class postage stamp decreased. But in 1970, Congress and President Richard Nixon lashed back at postal workers in retaliation for the Great Postal Strike of that same year with the Postal Reorganization Act. When Nixon signed the act into law he declared that henceforth the USPS should be “run like a business” and that revenue enhancements would be reduced to zero by 1976. For four years, minor supplements were paid but all funding stopped in 1980. Remarkably, it is the only agency of the US Government that has to raise all of its operating expenses. Nevertheless, with modest increases in postage fees and by consolidating operations, the post office continued to thrive without assistance. In 2006, however, the Postal Accountability Enhancement Act imposed a crushing burden on the postal service’s financial condition. Since that time, USPS ledgers have been in the red and they’ve had to liquidate their capital to pay the tribute. In 2011, to streamline this liquidation, the Postal Service’s Board of Governors signed a contract with CBRE, the world’s largest commercial real estate agency. CBRE now acts as agent in the sale of all USPS properties. It can be easily imagined that this is a sweet deal for CBRE, but here are some details to make its import more explicit:
- There are between 35,000 and 40,000 USPS building and land-parcel units in the nation. (That number has declined 17% in the last forty years, even as the population has increased more than 50% in the same period.)
- Currently, there are more than 60 buildings for sale – ranging in price from a high of $9 million for the Western Avenue post office in Los Angeles to $40,000 for one in Detroit. There are also 11 USPS land parcels for sale, ranging in price from more than $3 million in Austin, Texas to $13,500 in upstate New York.
- CBRE could collect, conservatively, between $2-3 billion if all USPS real estate were sold.
Threats posed by privatization of the USPS
If US highways were no longer needed for commerce and industry, it’s a good bet they’d be allowed to crumble. The USPS is experiencing such a rejection by capitalist enterprise. But even if we don’t need the mail service to conduct business (and we believe small businesses do need it for advertising, contracting, and invoicing), here are several reasons to sustain it:
- The USPS is a model of self-sufficiency. Since government funding of the post office was eliminated during the Nixon administration (making it one of only two postal services in the world that isn’t underwritten by government revenue – the other being Somalia’s), the USPS has continued to do its work efficiently. At the same time, it has not pursued unsustainable profits, preferring stability and affordability over expansion, in adherence to the universal service principle. Only during this decade of crisis when they are compelled to make unreasonable contributions to the Postal Service Retiree’s Health Benefit Fund (PSRHB) have they experienced dangerous shortfalls in revenue. When the period of PSRHB contributions has passed in 2017, the USPS will be able to get back in the black – that is, if it hasn’t had to liquidate too much of its infrastructure.
- To send a single letter costs $0.46. To send a single email requires paying a minimum monthly fee to an internet service provider of more than $30 or making a trip to an ephemeral library. Thirty bucks buys a lot of stamps. To send a month’s worth of bills and correspondence, might cost you $5.
- Digital communication is monitored. Google and Twitter are surrendering users’ private information to government authorities and corporate high-bidders. On Thursday, May 2, NYC Police Chief Ray Kelly said that the Boston Marathon bombing means privacy has been “taken off the table.” From Newsforage.com: “The FBI wants to make it mandatory for websites like Google and Facebook to have backdoors installed in their software.” (4/30/2013) Also, see this article in “Wired” 4/29/2013: http://www.wired.com/threatlevel/2013/04/fines-wiretap-noncompliance/. From thehill.com: “The Internal Revenue Service (IRS) has claimed that agents do not need warrants to read people’s emails, text messages and other private electronic communications, according to internal agency documents.”(4/10/13) Hand-mailed letters are a much better alternative because surveillance of hard correspondence must be done by people selecting and reading letters sent to and from already identified targets. The ease with which email can be scanned makes it much more dangerous to use for private communication.
- If postal service becomes the product of privately owned corporations, we should anticipate some or all of the following changes:
- Cost increases for sending mail for steady increase of profits.
- Subscription fees for receiving mail.
- No effective recourse for letters and packages tampered with in transit, unless the customer has enough money to pursue a dispute.
- Those without subscriptions and those living in rural areas will likely have to travel to collect their mail. Those living in low-income urban areas may have to travel across town. Seniors, disabled persons, the unemployed, and families in critical financial need will have to travel and wait in lines every month to receive government entitlements.
- Overland mail service will not be viewed as a growing industry. The principle of making it available to everyone will be abandoned, putting pressure on us to rely on digital communication exclusively, which is easily scanned and altered.
The plight of the USPS is that of all debtors - individually and collectively
Debt – being the seizure of assets and future labor – is the primary mechanism of privatization. Free market advocates claim that public service providers – whether they’re funded or merely sanctioned, as is the case with the USPS – are wasteful and that competition and corporate accountability compel efficiency. This flaccid argument veils the costs of privatization - if FedEx and UPS control the distribution channel for mailing ANYTHING, what will be the true cost to society? More unions will be dismantled and more jobs with decent pay and benefits will be replaced by low-wage, part-time jobs with little or no healthcare. The post office has proven itself to be a glaring exception to the principle of competitive efficiency. As a direct result, capitalists, in collaboration with politicians, have manufactured an exceptional condition with the intention of destroying organized labor and the USPS. This exception is an unprecedented requirement in the 2006 Postal Accountability Enhancement Act that the USPS pay $56 billion over ten years into the Postal Service Retirees Health Benefit fund. No other enterprise, public or private, is required to cover medical costs for retirees 75 years in advance as the USPS must do by 2017. This pre-payment mandate is driving an otherwise profitable public enterprise into bankruptcy. Services are being considered for elimination, and post offices, which are the assets of the community, are being sold off in an attempt to make up the lost revenue. If this continues, the USPS will lose customers and find itself with insufficient funds to continue service sometime in the next four years. On April 17, 2013, NALC President Fredric Rolando warned the House Oversight and Government Reform Committee that “on the merits, eliminating Saturday delivery would be a costly mistake that would not only make it harder for the Postal Service to grow the business but also would cost money by driving away customers.” A “shrink-to-survive strategy” is a way to move the USPS into the terminal ward.
We should oppose privatization because publicly accountable enterprises resist exploitation better than those that serve the interests of the 1%. Like the USPS, we are manipulated by fabricated financial hardships, which create the need to borrow money at any cost. Many services, most notably health care, education, and housing are more expensive than we can afford. The reason for this is the greed of those at the pinnacle of the capitalist system aided by their legions of lawyers and lobbyists. These services should function under the same universal service principle to that of the post office. Instead of everyone being able to have access to public services and anyone being able to afford it, the 1% have their sights on destroying the security of overland communication while making a neat profit. If we don’t act now, then the best model of public efficiency will be erased. Other essential services could be run for the true public if they could emulate the post office rather than be consumed by the 1%. We could begin to turn back the tide of the municipal debt of our cities to the banks. If your child’s school is underfunded, if the fares of public transport keep rising, if the fire department can’t respond quickly – you understand the need for a new, successful, public model.
Can reform legislation created by Congress and signed by the President save the USPS? Given that privatization is a top priority for capitalist entrepreneurs, and the growing dominance of their lobbying apparatus, it seems unlikely that any of the reasons we’ve listed above for saving the post office will influence the votes of enough of our elected representatives. Consider the recent failure of a bill requiring registration of gun ownership despite near-unanimous popular support. Who blocked the legislation? The NRA.
Strategies for opposing privatization of the USPS
We have two strategies to offer for saving the USPS:
- Pressure local politicians to resist privatization.
- Don’t let them stand on the argument that post offices are being sold to consolidate operations and make the USPS more efficient. Explain to city council members, mayors, and state assembly persons that selling off public assets earns only a bit of cash while it weakens the public organism. As public property is privatized, it is immediately used as collateral for further loans, which in turn shovel riches at the 1%. Selling a post office is like selling a kidney. As citizens of cities and towns fight to preserve what’s left of their local autonomy, their elected representatives must not cave in to federal pressure to turn every parcel of municipal geography over to profiteers.
- Privatization of the postal service will also result in the loss of affordable advertising and invoicing channels for small businesses. As their advertising costs go up, either their prices will rise as well, or the quality of their products will go down, or both. We should also ask: what will happen to public faith in the integrity of the documents of local governments if they’re mailed using private carriers?
- Also, the waiting period for USPS workers to become Fed Ex or Office Depot or Burger King employees will go along with municipal and county revenue losses, because – whether as unemployed persons or as corporate employees – their incomes will decrease, and corporations that don’t pay taxes will control more of total employment. Local jurisdictions will either have to borrow to continue providing essential services or trim their budgets.
- Encourage the members of the postal workers’ unions to increase their opposition to the “shrink-to-survive” strategies of the USPS Board of Governors. Unions are organizations for collective action – engines of resistance to privatization. We should encourage them to block further payments to the PSRHB, and we should support them in resisting government reprisals. There should be an open discussion between the postal unions and the grass roots people whose support they need. They have health benefits and pensions that they’re fighting to save. The rest of us are fighting to get those securities, so why should we care about workers with great jobs? The unions should tell the bigger story, that they are fighting for more than their own jobs. They’re fighting to defend collective bargaining for Federal employees. This situation is Wisconsin gone national.
- Occupy post offices and block their sale. By such direct actions, we say to the 1% that if they proceed with selling post offices, then we’ll make some noise. While it’s unlikely that these actions will ultimately block sales and provoke the capitulation of the Board of Governors, much less the 1%, our demonstrations can enlarge the social consciousness of the community by inviting awareness of how much of our society is public property; our property. The value of property diminishes when it changes from public to private control, because there is accountability to us for its proper use. Private owners never need to account for social and environmental harm, only financial harm to their investors.
- Work with us to set up minimal fee check cashing outlets in post offices. Payday lending and storefront check cashing outlets are located in areas where they’re most effective at preying on low-income and minority populations who cannot use major banks because of language difficulties, disability, mistrust, or lack of documentation. Strike Debt is beginning to develop a plan to open check cashing outlets that charge a minimal fee for the service in order to undermine the profitability of corporate outlets providing the same service with astronomic fees. The low fees we would charge would be used to cover the rental costs for secure locations, equipment rental and payment if necessary for check validation fees and software.
- Ultimately, we believe the best locations would be inside post offices, in conjunction with a public banking facility. Since post offices are ubiquitous, our check cashing outlets could be located in communities where they’re most needed: in low-income areas where there a few banks. To advance this plan, we will need the input and support of those who oppose exploitation by corporate banks.
- The USPS can continue to run efficiently without the government’s monopoly protection. (Currently, FedEx is the only major carrier that can deliver “non-urgent” letters and only for no less than 200% of the price of USPS postage.) Private carriers may compete for USPS customers, but they’ll have to establish extensive new distribution systems to combat a huge carrier whose network is already well-established.
- Without the burden of the unprecedented pre-payment mandate, the USPS accounts will turn from red to black. With the restitution of the $34 billion already paid into the PSRHB fund since 2007 they will be able to easily pay off their outstanding loans (under $200 million). The postal service can hold postage fees at current levels, continue six-day service, keep post offices open, and continue to provide the excellent employment opportunities as they have done for generations.
Public services must be managed publicly
Keeping the USPS intact can take the collective consciousness of the dangers of privatization and the struggle to resist it to the next higher quantum level and turn the tide against the metastasis of capitalist concentration. While many worker-owned companies and co-ops currently make priorities of fair distribution of wages, and of transparency and accountability, none of them are among the largest employers in the world. With or without government protection, the USPS can remain a truly public entity.