Better postal privatization

Moneybox
A blog about business and economics.
July 25 2012 11:02 AM

Privatizing the Postal Service Without Screwing The Workers

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PITTSBURGH, PA - JULY 21: Members of the Pittsburgh Pirates organization and family members of former player Willie Stargell unveil a commemorative stamp issued by the United States Postal Service prior to the game against the Miami Marlins at PNC Park on July 21, 2012 in Pittsburgh, Pennsylvania.

Photo by Joe Robbins/Getty Images

Peter Orszag wants to sell the U.S. Postal Service to private investors, while conceding that this would be very bad news for the existing postal workers.

Given that the U.S. government has no particular need to raise funds through asset sales, it seems to me that most of the goals of this initiative could be easily achieved by turning the USPS into a worker-owned firm. In other words, you "privatize" it by selling its shares for $0 to people who work there. Then you get Congress out of the way. That accomplishes the most important real public policy benefit of postal privatization, which is that it would encourage USPS to manage its real estate portfolio rationally. Right now that can't be done because the decision-making is all political and no congressman wants to see any post offices closed down in his district. A worker-owned Postral Service would also be in a position to shut down hugely money-losing routes unless local governments coughed up subsidy for mail service.

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Then beyond that the worker-owned Postal Service could do what it likes. It could sell itself to private investors, creating a one-time windfall for workers at the cost of job losses. Or it could maintain a large staff at the cost of depressing the value of the equity the workers own.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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