# U.S. postal rate increases: why not just a nickel each time? **URL:** \ **Category:** Great Debates\ **Created:** [March 13, 2006, 5:09am UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142 "2006-03-13T05:09:35Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Elendil\_s\_Heir](https://avatars.discourse-cdn.com/v4/letter/e/7cd45c/32.png) [@Elendil\_s\_Heir](https://boards.straightdope.com/u/Elendil_s_Heir)\ **Post date:** [March 13, 2006, 5:09am UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/1 "2006-03-13T05:09:35Z")
I’d rather have the price of stamps go up five cents each time, and presumably less frequently, than to have the little dribs-and-drabs rate hikes which have been inflicted on us in recent years. And it’s not even the same for different kinds of mail: with the most recent hike (effective January 8), First Class mail went up two cents, each additional ounce went up three cents, and postcards went up just a penny. A little confusing. Why not just do it a nickel each time? We could all stock up on five-cent stamps and use them across the board, every time a rate increase took effect. What say you? ---
**Author:** ![Sal\_Ammoniac](https://avatars.discourse-cdn.com/v4/letter/s/8dc957/32.png) [@Sal\_Ammoniac](https://boards.straightdope.com/u/Sal_Ammoniac)\ **Post date:** [March 13, 2006, 2:54pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/2 "2006-03-13T14:54:08Z")
I agree. There must be a significant cost incurred (over and above the increase) every time the price of stamps is raised, which to me says they should go through the whole drill less frequently. Though maybe it would be considered inflationary to raise the price by five cents at a go. I’m sure somebody knows the actual “why” here. And you know what’s funny? I have no idea how much a first-class stamp costs. Haven’t bought one in years. ---
**Author:** ![spazattak](https://avatars.discourse-cdn.com/v4/letter/s/8e8cbc/32.png) [@spazattak](https://boards.straightdope.com/u/spazattak)\ **Post date:** [March 13, 2006, 3:02pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/3 "2006-03-13T15:02:51Z")
I think a better question would be why do they need to increase at all? Maybe they could cut the rate increases if they cut out their advertising and artistic budgets. Does the post office seriously need to advertise? Or put works of art on envolopes that only get thrown away? It’s such a waste. ---
**Author:** ![BobLibDem](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/boblibdem/32/3149_2.png) [@BobLibDem](https://boards.straightdope.com/u/BobLibDem)\ **Post date:** [March 13, 2006, 3:05pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/4 "2006-03-13T15:05:31Z")
I agree with the OP. I’d rather see a nickel increase every five years or so. And plan them far enough ahead so they can print the new stamps with the correct postage on rather than the denominationless ones they always use in the early months of the new rate. ---
**Author:** ![EEMan](https://avatars.discourse-cdn.com/v4/letter/e/a6a055/32.png) [@EEMan](https://boards.straightdope.com/u/EEMan)\ **Post date:** [March 13, 2006, 3:08pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/5 "2006-03-13T15:08:08Z")
> [@spazattak](#): > > I think a better question would be why do they need to increase at all? Maybe they could cut the rate increases if they cut out their advertising and artistic budgets. Does the post office seriously need to advertise? Or put works of art on envolopes that only get thrown away? It’s such a waste. The USPS does not make it’s money on ‘mail’ as it were… but in package shipping, and associated packaging… and for quite a number of years they were losing market share to UPS and FedEX (and others to a lessor degree)… so they started to advertise… which HAS been helping… You might ask ‘who cares’… but without the USPS making a profit off packages, you would see a large increase in the cost of letters (esp in this day and age where we use so many electronic formats)… what you DONT want to have happen is the end of the post office… as we would no longer have a channel for ‘letters’ ---
**Author:** ![drewbert](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/drewbert/32/15890_2.png) [@drewbert](https://boards.straightdope.com/u/drewbert)\ **Post date:** [March 13, 2006, 3:12pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/6 "2006-03-13T15:12:13Z")
I would think that smaller, somewhat more frequent increases would be easier on the budgets of businesses that do a lot of mailing. ---
**Author:** ![Cliffy](https://avatars.discourse-cdn.com/v4/letter/c/59ef9b/32.png) [@Cliffy](https://boards.straightdope.com/u/Cliffy)\ **Post date:** [March 13, 2006, 3:25pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/7 "2006-03-13T15:25:35Z")
There’s a simple reason the USPS doesn’t simply raise rates a nickel at a time. Namely, the Postal Srvices’ operational personnel don’t get to decide on rates. Whenever the USPS wants to increase rates, they have to apply to the Postal Rate Commission, an independent agency whose job it is to keep rates as low as possible. Then the PRC offers ate suggestions to the USPS Board of Governors, sort of like the Service’s Board of Directors but made up entirely of people from outside the Postal Service (the Postmaster General and Deputy Postmaster General serve on the Board for policy and personnel decisions, but only the independent Governors have rate-setting authority). The PRC and the Bd of Governors ultimately decide on the rates. When the Bd allows an increase at all, it’s always the bare minimum necessary to keep the USPS solvent, even though the Service always asks for a larger increase, enough so that it could maintain such a rate for some time. But because the request gets whittled down in stages, it’s always so small that the Service immediately needs another one. As for marketing, that’s saving you substantial tax increases down the road. We have to have the mails; you can’t run civil society without mail, let alone the economy. But because FedEx and email have been steadily siphoning off USPS’s volume, economies of scale are lessened. Every extra piece of mail that could have fit on the plane or in the mailcarrier’s bag but which wasn’t sent through the USPS raises the average cost per item. But no matter how expensive on average the mail is, Congress will never let it go out of business, because we need the mails. So what will happen is rates will continue to go up, and so will your taxes to subsidize it. If the marketing is effective, it’s delaying the day when that happens. If the marketing isn’t effective it’s a drop in the bucket compared with the real costs of running the mails. –Cliffy ---
**Author:** ![Sal\_Ammoniac](https://avatars.discourse-cdn.com/v4/letter/s/8dc957/32.png) [@Sal\_Ammoniac](https://boards.straightdope.com/u/Sal_Ammoniac)\ **Post date:** [March 13, 2006, 4:10pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/8 "2006-03-13T16:10:08Z")
**Cliffy** , thanks. This is the piece we needed to know. So just how much _is_ a first-class stamp, anyway? By the way, has anybody quantified the cost to business of a change in the postal rates (subtracting out for the actual increase, of course)? It seems like the bill for reprinting/reprogramming software would be somewhat substantial. ---
**Author:** ![EEMan](https://avatars.discourse-cdn.com/v4/letter/e/a6a055/32.png) [@EEMan](https://boards.straightdope.com/u/EEMan)\ **Post date:** [March 13, 2006, 4:13pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/9 "2006-03-13T16:13:33Z")
> [@Sal Ammoniac](#): > > **Cliffy** , thanks. This is the piece we needed to know. So just how much _is_ a first-class stamp, anyway? By the way, has anybody quantified the cost to business of a change in the postal rates (subtracting out for the actual increase, of course)? It seems like the bill for reprinting/reprogramming software would be somewhat substantial. $0.39 I believe… And i’m sure someone has quantified the cost to business… though I can’t find a fast study… The studies I have seen say that most stamps are ‘reprinted’ on an almost monthly basis… so you would be talking about the cost of new dye making… not priniting ---
**Author:** ![Sal\_Ammoniac](https://avatars.discourse-cdn.com/v4/letter/s/8dc957/32.png) [@Sal\_Ammoniac](https://boards.straightdope.com/u/Sal_Ammoniac)\ **Post date:** [March 13, 2006, 4:16pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/10 "2006-03-13T16:16:18Z")
**EEMan** , I’m talking about having to reprint a brochure or something that gives the price of mailing, not about reprinting the actual stamps. ---
**Author:** ![EEMan](https://avatars.discourse-cdn.com/v4/letter/e/a6a055/32.png) [@EEMan](https://boards.straightdope.com/u/EEMan)\ **Post date:** [March 13, 2006, 4:18pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/11 "2006-03-13T16:18:32Z")
> [@Sal Ammoniac](#): > > **EEMan** , I’m talking about having to reprint a brochure or something that gives the price of mailing, not about reprinting the actual stamps. If they tied the ‘replenishment’ of such things to the changes… (time wise) it would be almost zero… but I’m unaware if they do such things ---
**Author:** ![akwally1](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/akwally1/32/3220_2.png) [@akwally1](https://boards.straightdope.com/u/akwally1)\ **Post date:** [March 14, 2006, 12:26am UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/12 "2006-03-14T00:26:09Z")
Along with what **Dragon Drop** had to say, the USPS has contracted a huge portion of its mail volume to FedEx for a couple of years now. After 9/11, the commercial carriers (who carry/carried a large volume of the mail) were no longer allowed to take anything over 16 oz. So the excess has been given to FedEx. Wally ---
**Author:** ![Thunder](https://avatars.discourse-cdn.com/v4/letter/t/a8b319/32.png) [@Thunder](https://boards.straightdope.com/u/Thunder)\ **Post date:** [March 14, 2006, 12:35am UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/13 "2006-03-14T00:35:41Z")
I just wanted to say that it was TV-surreal humorous to find a long, detailed reply about the USPS from a poster named **Cliffy**. ---
**Author:** ![opossum](https://avatars.discourse-cdn.com/v4/letter/o/2bfe46/32.png) [@opossum](https://boards.straightdope.com/u/opossum)\ **Post date:** [March 14, 2006, 1:47am UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/14 "2006-03-14T01:47:35Z")
> [@Dragon Drop](#): > > UPS now cooperates with the post office. This is an official deal as of a couple months ago. > They accept whole truckloads of packages from shippers, and will do all the weighing and sorting and checking for valid addresses, and apply the correctly metered postage. The sorted mail then goes to the USPS for delivery. Who gets what cut of the total pie is secret. What UPS charges its customers for this program is secret (and probably varies from customer to customer – which is why it’s secret). What they pay USPS is the same rate anyone would get for the same service (delivering small, presorted parcels that are “dropshipped” directly to the carrier). ---
**Author:** ![Anaamika](https://avatars.discourse-cdn.com/v4/letter/a/5f9b8f/32.png) [@Anaamika](https://boards.straightdope.com/u/Anaamika)\ **Post date:** [March 14, 2006, 1:59am UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/15 "2006-03-14T01:59:14Z")
**Cliffy** , you work for the Post Office, don’t you? I’d really love a “Ask the Postal Worker” thread, if you haven’t made one already. What do you think? ---
**Author:** ![opossum](https://avatars.discourse-cdn.com/v4/letter/o/2bfe46/32.png) [@opossum](https://boards.straightdope.com/u/opossum)\ **Post date:** [March 14, 2006, 2:02am UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/16 "2006-03-14T02:02:53Z")
> [@Cliffy](#): > > There’s a simple reason the USPS doesn’t simply raise rates a nickel at a time. Namely, the Postal Srvices’ operational personnel don’t get to decide on rates. Whenever the USPS wants to increase rates, they have to apply to the Postal Rate Commission, an independent agency whose job it is to keep rates as low as possible. Then the PRC offers ate suggestions to the USPS Board of Governors, sort of like the Service’s Board of Directors but made up entirely of people from outside the Postal Service (the Postmaster General and Deputy Postmaster General serve on the Board for policy and personnel decisions, but only the independent Governors have rate-setting authority). > > The PRC and the Bd of Governors ultimately decide on the rates. When the Bd allows an increase at all, it’s always the bare minimum necessary to keep the USPS solvent, even though the Service always asks for a larger increase, enough so that it could maintain such a rate for some time. But because the request gets whittled down in stages, it’s always so small that the Service immediately needs another one. > > As for marketing, that’s saving you substantial tax increases down the road. We have to have the mails; you can’t run civil society without mail, let alone the economy. But because FedEx and email have been steadily siphoning off USPS’s volume, economies of scale are lessened. Every extra piece of mail that could have fit on the plane or in the mailcarrier’s bag but which wasn’t sent through the USPS raises the average cost per item. But no matter how expensive on average the mail is, Congress will never let it go out of business, because we need the mails. So what will happen is rates will continue to go up, and so will your taxes to subsidize it. If the marketing is effective, it’s delaying the day when that happens. If the marketing isn’t effective it’s a drop in the bucket compared with the real costs of running the mails. > > –Cliffy USPS management and the Board usually get what they ask for, at least for the First Class rate. The other piece of this is that the law mandates that USPS break even. This means they can’t raise rates as high as they’d like – they have to justify it by showing increased costs. Each penny increase results in billions in increased revenue, and they aren’t allowed to charge rates that would result in high profits over any length of time. Large mailers would take them to court, and probably win. They basically shoot for a three-year cycle – one year slightly in the black, one year roughly even, then one year slightly in the red (during which time they’re preparing for the next increase – the whole PRC process takes a year). If their costs (mostly fuel and labor) go up faster than their revenue, rates go up faster (such as in the late 90’s/early 00’s). If their costs are more steady or they get a windfall, rates stay in place longer (eg., 2003-06). ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [March 15, 2006, 12:02am UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/17 "2006-03-15T00:02:35Z")
> [@Elendil's Heir](#): > > Why not just do it a nickel each time? We could all stock up on five-cent stamps and use them across the board, every time a rate increase took effect. > > What say you? A much better solution is to just stop selling stamps by dollar value for common use. Sell a “First class” stamp and a “Postcard” stamp. They’d have some current dollar value you could look up if you were sending a larger package, and obviously business customers could still have postage meters, but the hassle of a rate increase for the average citizen is lessened substantially, because there’s no need to go get a bunch of 2 or 3 cent stamps every few years. A “First Class” stamp will always mail a letter. Simple. It would also help the USPS’s own financial calculations, because they could just ask for an increase whenever they needed it, rather than waiting a few years until they could increase by a few cents at a time. > [@spazattak](#): > > Maybe they could cut the rate increases if they cut out their advertising and artistic budgets. Does the post office seriously need to advertise? Or put works of art on envolopes that only get thrown away? It’s such a waste. I’m pretty sure that the artistic budgets are _well_ covered by the many stamp collectors who buy entire sheets of each new stamp and then never mail anything with them. ---
**Author:** ![GorillaMan](https://avatars.discourse-cdn.com/v4/letter/g/50afbb/32.png) [@GorillaMan](https://boards.straightdope.com/u/GorillaMan)\ **Post date:** [March 15, 2006, 12:07am UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/18 "2006-03-15T00:07:25Z")
> [@iamthewalrus(:3=](#): > > A much better solution is to just stop selling stamps by dollar value for common use. Sell a “First class” stamp and a “Postcard” stamp. FWIW, this is precisely what the Royal Mail has done for some years. There’s ‘1st’, ‘2nd’ and ‘E’ (for European postage) stamps, which remain unchanged when the rates increase. ---
**Author:** ![Least\_Original\_User\_Name\_Ever](https://avatars.discourse-cdn.com/v4/letter/l/e480ec/32.png) [@Least\_Original\_User\_Name\_Ever](https://boards.straightdope.com/u/Least_Original_User_Name_Ever)\ **Post date:** [March 15, 2006, 12:38am UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/19 "2006-03-15T00:38:24Z")
> [@Sal Ammoniac](#): > > I agree. There must be a significant cost incurred (over and above the increase) every time the price of stamps is raised, which to me says they should go through the whole drill less frequently. Though maybe it would be considered inflationary to raise the price by five cents at a go. I’m sure somebody knows the actual “why” here. > > And you know what’s funny? I have no idea how much a first-class stamp costs. Haven’t bought one in years. well, i’m sure you already know that this is precisely the reason for the rate hike. increase with emails and such. maybe we should find a way to reogranize the postal system instead of funding it with increased hikes. ---
**Author:** ![Elendil\_s\_Heir](https://avatars.discourse-cdn.com/v4/letter/e/7cd45c/32.png) [@Elendil\_s\_Heir](https://boards.straightdope.com/u/Elendil_s_Heir)\ **Post date:** [March 15, 2006, 5:44pm UTC](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142/20 "2006-03-15T17:44:44Z")
> [@iamthewalrus(:3=](#): > > A much better solution is to just stop selling stamps by dollar value for common use. Sell a “First class” stamp and a “Postcard” stamp… But wouldn’t lots o’ folks go out and buy a gross of the stamps now, and use them for many years to come, avoiding future higher prices (and, incidentally, depriving the Postal Service of the post-increase income stream)? [Next page](https://boards.straightdope.com/t/u-s-postal-rate-increases-why-not-just-a-nickel-each-time/348142.md?page=2)