Postal worker checking in (okay, not an American one, but the changes in mail processing in the last couple decades are pretty universal):
My guess is that you’ve probably had a bit of bad luck, and that your sample size is too small. In Australia at least, the advances in OCR technology over the last twenty years have made mail processing more efficient, and I’m sure that is the same in the US. I am expected to sort 1500 articles per hour manually to a “72-way break” (72 pigeon holes within reach of my hands). Since there are thousands of post offices in the country, that 72 doesn’t quite cut it, so letters are sorted multiple times in their journey. On a machine however, I can run about 38 000 articles through in the same hour, and send them to over 300 different output apertures, so they are sorted fewer times (and it’s processing not transit that is the time killer). Where in the old days, mail would be delayed because the sorters simply ran out of time and the stuff got left behind, these days if it’s delayed it’s usually because a machine has misread the address and sent it to Mongolia instead of California. So, you’ll probably find that you get fewer late letters these days, but the ones which are late are very late. In general though, Australia Post operates at about 96-97% “on time” efficiency, compared to about 90% in the early 90s, according to the KPMG auditing. With “World’s Best Practice” , the International Postal Union, ISO 9002, and the like, most other industrialised nations’ postal administrations (the USPS in your case) would be likely not much different in this.
Competition and the internet has made things tighter in the business these days, and yes, they are always looking for ways to truck stuff long distance instead of flying it, but they’d probably have to do that while keeping to guaranteed delivery standards, and that’s easier said than done, so your letter from Milwaukee would have probably still been flown.
You will notice increased transit times for international stuff (especially parcels) due to hightened security, but I can still get a letter to the continental US from Sydney within the week most times. For standard sized domestic letters, it would probably seldom be an issue.
Short answer: the mail is probably slightly better these days. The average person might not notice ten letters getting there in three days instead of two, but they will notice three of those letters getting there a week late, even if the other seven are on time.