Reminder - Price of 1st class stamp to go up 3 cents Jan. 26th
by Pinedale Online!
January 26, 2014
The Postal Regulatory Commission has authorized the U.S. Postal Service (USPS) to increase the rates for a first-class stamp by three cents, from $.46 to $.49 cents, effective Sunday, January 26th. The rate for bulk mail, periodicals and package service rates will increase six percent. The price of postage for a postcard will rise to $.34 cents. Forever stamps, good for first-class postage whatever the future rate, can be purchased at the lower $.46 cent price until the rate is effective January 26th. The new rate is effective for two years.
Under federal law, the USPS cannot raise prices more than the rate of inflation without approval from the Postal Regulatory Commission. The special authorization for increases of 4.3 percent approved in December are on top of a 1.7 percent increase, equal to the amount of inflation, that was approved in November. Prior to that, the price for first-class postage increased from $.45 to .46 cents in January, 2013.
The Postal Service is a semi-independent, quasi-governmental agency that does not receive tax money for its operations, but is subject to congressional control over its operations and pricing. The agency has seen a significant decline in the amount of mail volume it handles due to a variety of factors including new technology that makes direct communication cheaper and easier than physical mail correspondence. The agency reportedly had a $15.9 billion loss in 2012.
The Postal Service currently employs around 500,000 workers and is taking active measures to reduce its workforce. Through attrition measures such as buyouts and early retirement incentives, the USPS has shed about 200,000 jobs over the past several years and aims to trim an additional 100,000 in order to regain sound fiscal footing. It is currently offering $20,000 buyouts to about 21,000 postmasters across the nation as part of a reduction-in-force effort for 2014 ($420 million). It is also in the process of replacing many full-time employees with cheaper part-timers, which will allow it to substantially cut pay and benefit expenditures. The agency has a $5.6 billion annual payment commitment to cover expected health care costs for future retirees, which Congress legislated in 2006 the agency is required to pay. It has reportedly already defaulted on three of those payments.
In early 2013, USPS announced plans to close more than 3,600 rural post offices across the nation. After loud public outcry, the agency backed down and instead implemented reduced business hours and reductions in services at many of those locations. In an effort to reduce their costs, the agency has asked Congress to pass legislation to allow it to end Saturday mail delivery and reduce payments on retiree health benefits.
For consumers who have cut back on their use of mail for correspondence and sending packages, the rate increase may have little impact on their pocketbooks. Businesses and organizations that do direct mailings and billing, bulk mail senders, magazine and periodical companies, the greeting card industry, and bookstores are among those who would pay more for postage in their operations under the new rate increases. Those cost increases will in all likelihood be passed on to customers as higher prices for products and services.
The 49 cent stamp price is guaranteed for two years.
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