Published: May 12, 2008 05:40 pm            

Stamps on the rise

The United States Postal Service is raising the price of stamps to 42 cents today. And why not? Everything else is going up. Gas, milk, eggs, vegetables, etc.

Monday’s stamp price increase—the second in two years—suggests postal rates will rise annually, according to Dr. Charles Guy, the former director of the Postal Service’s Office of Economics and Strategic Planning.

“Raising stamp prices -- even on a yearly basis -- won’t save the Postal Service from the significant fiscal challenges it faces,” said Guy.

Guy said because of reform legislation passed in 2006, USPS must keep future rate increases within the official rate of inflation. The legislation also requires the Postal Service to provide $50 billion to fund its pension obligations over the next decade.

“With stamp prices tied to the Consumer Price Index, the Postal Service can’t just raise prices to meet its pension-funding requirements. That leaves it only two ways to cover costs: lowering the amount spent on labor or introducing new products that will increase revenue,” explained Guy.

Monday’s rate hike represents the fifth price increase since 2001. Stamp prices have gone up nearly 24 percent during that time. Maybe congress should allow the USPS to raise the price to 50 cents now and leave it that way for the next 10 years so people won't have to bother with this every year.

        

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