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The Postal Service Outsources Itself to a Company Doing Almost as Badly as the Postal Service

Credit: Joe Raedle/Getty Images

In November, the United States Postal Service launched a big partnership with Staples under which 84 of the office-supply retailer’s stores, in four states, would start offering nearly comprehensive postal services, staffed by Staples employees. If this year-long pilot program succeeds, postal officials said, it could well expand to hundreds more Staples stores around the country.

Meanwhile, last week, Staples announced that it is closing 225 of its stores—some 12 percent of its North American outlets—following a plunge in revenues in the fourth quarter of 2013. The company’s stock plummeted 15 percent on the announcement.

There is something wrong with this picture. What exactly is the postal service doing staking its future to a partnership with a company whose business model is if anything in even greater trouble than its own?

There’s no question the postal service needs to rethink the way it does business in the age of e-mail and electronic bill paying—mail volume is down more than 25 percent from its 2006 peak. That’s why it’s heartening to see the USPS capitalizing on the one big trend in its favor—the growth in e-commerce—by agreeing to provide Sunday delivery for Amazon. And that’s why it’s encouraging to see so much discussion of other ideas for expanding offerings at post offices, such as providing some banking services in areas underserved by traditional banks.

On its face, the partnership with Staples sounds like another no-brainer—sure, why not let people send packages from stores? It simply expands access and adds convenience, right?

But it’s not that simple. There’s reason to worry that the alliance with Staples, and perhaps other retailers to follow, will result not in an expansion of postal services but in their de facto replacement by an archipelago of private-sector substitutes. And that would have real costs for the country.

For starters, there’s the matter of who’s working the counters. Postal service employees make an average of $25 an hour, plus solid benefits that have helped make the USPS one of nation’s most enduring sources of middle-class jobs, not to mention one of its biggest avenues of economic mobility among African-Americans. Workers at Staples stores make little more than the minimum wage, with meager benefits. If you’re worried about our country’s income inequality and wage stagnation, then it doesn’t make a whole lot of sense to be shifting the task of handling our mail from people making middle-class wages to people making poverty-level ones.

“Corporate America is driving a race to the bottom and we think that’s what’s happening here, too,” Mark Dimondstein, the new president of the 200,000-member American Postal Workers Union, which has been protesting the Staples partnership, told me in a recent interview. Dimondstein says the union would be fine with setting up counters in Staples—if it was truly an extension of the post office, with trained and decently paid postal employees. “It’s piecemeal privatization. It’s the cooking the frog slowly. It’s not privatization by legislation, it’s by pieces, and the pieces are getting bigger and bigger.”

Important as the wage issue is, there is a larger issue at stake here, as well. The postal service is a national institution that predates the founding of our country (Ben Franklin was appointed our first postmaster general in 1775). It is a service relied on particularly heavily by those members of the public who are not necessarily well served by the rest of the marketplace—the elderly; the infirm; rural Americans. And so it’s disconcerting to see its functions being sloughed off to chain stores in strip malls, stores that may not even be around all that much longer. The postal service tried something similar to the Staples partnership back in the late 1980s, with Sears. Been to a Sears store lately? Retail is transient.

Postal service officials of course deny that the Staples counters (which are currently limited to stores in California, Georgia, Pennsylvania and Massachusetts) are meant to replace traditional post offices or postal service employees. In a recent video message to employees, Postmaster General Patrick Donahoe declared, “This is all new business for us. The idea we’re somehow or other taking jobs away, that Staples is supplanting the postal office, there is no intention of this.” He compared the Staples counters to other private-sector alliances, such as having stamps available for sale at Costco. “It’s convenience, it’s access, it’s the way of the world,” he said. “I’m not gong to back away from it.” He rejected the notion that this represented a slow-motion privatization of the institution: “There is no interest in privatizing,” he said. “Do not let people get you confused with issues about privatization.”

There are a few problems with this dismissal of concerns. For one, it’s disingenuous to compare the installation of full-service postal counters at Staples (which are providing 80 percent of traditional postal services, all but registered mail and a few other services) with making it easier to buy stamps at the grocery store or drug store. No one objects to the latter.

Second, of course it’s not “all new business” being created at Staples. As a USPS spokeswoman I spoke with confirmed, one of the whole points of the Staples counters is to allow existing postal customers—including, say, small business owners who spend a lot of time at Staples— to take care of their shipping when they’re at Staples, and thereby shorten lines at the post office. “Some of that traffic that would go to the post office would go to Staples,” said the spokeswoman, Darleen Reid-deMeo. “That way, you’ve got our full attention and we can dazzle customers with how good we really are.”

And finally, to the extent that existing USPS business shifts from the post office to Staples, of course it reduces the need for hiring additional post office employees and increases the pressure to shorten hours or close branches in areas that are already getting relatively low traffic. (The postal service is in the midst of hiring some letter carriers, but the ranks of counter employees has been steadily declining by attrition—since 2008, the postal service has reduced its ranks by 200,000.) Donahoe admitted as much in a recent interview with USA Today, acknowledging that the Staples alliance could save money in employee costs even as he insisted that wasn’t the driving rationale. “Keeping our expenses down is no different than what any other business would do,” he said.

Staples, meanwhile, declined to discuss the partnership at all: "As a matter of policy, we don't provide details on our pilot programs or on our agreements with vendors," said company spokeswoman Carrie McElwee. No, it's not reassuring that in Staples' eye, our nation's postal service is a "vendor," a private business concern about which it cannot comment publicly.

So next time you’re in a long line at the post office, with only one or two employees manning the counter where there really ought to be three or four, keep in mind that this is part of a deliberate strategy from above. Postal service management could have added another person to that counter, or lengthened hours well beyond the frustrating windows we all know so well (the union says it’s all for adding hours outside the 9-5 box, or other innovations beyond existing service to bring more customers to existing branches.)

Instead of adding another person to that counter or extending hours, the postal service management decided they’d rather have you head off in search of a Staples, somewhere out there in the big-box jungle. That is, if there’s even a Staples left standing in your neck of the woods. Somehow, I doubt this is what Ben Franklin had in mind.