How Post Office Closings Could Increase Economic Inequality

Due to its ongoing financial woes, the United States Postal Service (USPS) has contemplated suspending Saturday mail service, as well as closing offices across the country. But a Reuters analysis shows that those office closing could increase economic inequality, hitting area that are already on the wrong end of economic disparity:

Some of America’s poorest communities – many of them with spotty broadband Internet coverage – stand to suffer most if the struggling agency moves ahead with plans to shutter thousands of post offices later this year, a Reuters analysis found. Nearly 80 percent of the 3,830 post offices under consideration are in sparsely populated rural areas where poverty rates are higher than the national average, demographic data analyzed by Reuters shows.

The Postal Service is not even exploring the economic effect that its office closings will have. And the closing under review would hardly save the USPS any money. In fact, “closing all of the post offices under consideration would save about $295 million a year — about four-tenths of 1 percent of the Postal Service’s annual expenses of $70 billion.” “That’s not even a drop in the bucket. The bucket won’t ripple,” said former Postmaster General William Henderson.

Adding insult to injury is the fact that the Post Office’s financial crisis is largely fictional, a relic of Congress’ decisions rather than any actual problems at USPS. As we’ve laid out before, “almost all of the postal service’s losses over the last four years can be traced back to a single, artificial restriction forced onto the Post Office by the Republican-led Congress in 2006,” which requires USPS to pre-fund pensions for employees that it hasn’t even hired yet. This is a requirement with which no other company has to grapple.

At the moment, “nearly 90 percent of the 24 million Americans without wired broadband access live in rural areas,” making them most susceptible to economic pain should USPS offices close. “The postmaster general doesn’t have a clue about what’s going on in rural America, and it shows,” said Sen. Jon Tester (D-MT).