Two Cents

The Postal Service wants to raise the price of a letter stamp from 37 cents to 39. Here's my two cents (since they asked).

How much does it cost to send a letter? It has to be picked up by a mailman, processed, sent to a regional post office, flown or driven to the receiving office, and then hand-delivered at the other end. That's a lot of postal workers! Let's assume that they're charging us a reasonable rate. Let's also assume that postal employees cost (not make, but cost) $60,000 per year on average, including marginal overhead. That boils down to $32 per hour. Let's also assume that one-fourth of Postal Service expenses are non-delivery-personnel-related. This would include transportation, fixed overhead, and administration. Do the math and you get about half a minute spent on each letter. That's right: the Postal Service spends half a minute dealing with your letter. Amazing, huh?