he United States Postal Service is the largest single employer of federal workers outside of the armed forces. Its management has enjoyed a monopolistic advantage which has generally inhibited any incentive to concern itself with the cost effectiveness of its operations. That oversight is one which has been fully exploited by the postal unions. Today a postal employee earns an average wage and benefit package of about $25,000, or 33.1 percent more than his comparably skilled private industry counterpart. Since the 1970 Postal Reorganization Act, postal costs have risen from $8 billion in 1970 to $23 billion in 1982. A staggering 84 percent of those operating costs go towards wages, which grew 123 percent over that period.
In "Privatizing the United States Postal Service," Postal Rate Commissioner John Crutcher exposes the reasons behind such a rapid rise in postal costs and looks at how private businesses have begun to compete with the Postal Service. Commissioner Crutcher offers some compelling arguments for scaling postal costs by contracting out certain mail services, and he argues that postal costs could be brought under control if the Postal Board of Governors discards its rubber stamp approach to governance.