2 cents too much
IF you are as annoyed as I am every time I have to add an extra 2-cent stamp to the letter I want to mail, you may join me in blaming Congress for what strikes me as an unnecessary and improper addition to the cost of living. It is also an unnecessary extension of the inflation which has plagued our economy ever since Lyndon Johnson tried to fight the Vietnam war on borrowed money. The prime excuse for an annual round of higher wages is the rising cost of energy and food. But energy and food are not going up in the United States these days.Skip to next paragraph
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The decline in energy and food costs lies behind the present decline in the wage level. Hardly a day goes by without another company saving itself from bankruptcy by an agreed and accepted decline in wages.
US postal workers are not under- paid. The proof is in the numbers waiting in line for the next vacancy. If every postal worker walked out on strike tomorrow there would be enough candidates waiting in line to refill every position several times over. Salaries plus fringe benefits (pensions, security, tenure) make the postal service desirable.
The postal service has been making money at the old pay scales and postage rates. In view of what is happening in the US wage market, the managers of the service proposed a three-year freeze on wages for all workers, plus a 23 percent cut in the wage scales for new workers. The freeze, plus the cut for new workers, would have tended to bring down wages in the postal service toward the levels that prevail in private employment for similar work.
The postal workers objected. The postal workers went to Congress. The postal workers persuaded Congress not only to veto the freeze and the cut; they persuaded Congress to bring its influence to bear on the arbitration process. The end of it was that the postal workers (all 702,000 of them) got a three-year contract with a raise of 2.7 percent each year of the three.
What could have been a wage freeze for established postal workers plus a rollback for new workers has turned into another contribution to the inflation. Its first consequence is that annoying extra 2-cent stamp we are now sticking on our letters. That isn't the end of it. The talk is that the higher wages Congress has mandated will probably mean one or more further rise in the postal rate. There is talk of a first-class letter costing 26 cents, or more.
Every time something like this happens, my mind goes back to the story of how Hjalmar Schacht broke the German inflation back in the '20s of this century and put German currency on a sound basis.
He gave every business, every industry, and every branch of government a fixed budget -- and made them stick to it. When a government department said it needed more to pay its workers, he said no. They either cut the wages or the number of workers. At the end of six months the German economy was stable, and employment began to pick up.
The postal workers enjoy special privileges. They work in a protected industry. They have a monopoly on the delivery of postal mails. If the postal service were opened to competition, then new private services would spring up overnight. They would be delivering the mail at less cost.
Much of the American working population is learning how to get along on a reduced income. True, not all living costs are down. The decline in oil prices has not yet been reflected in the prices of all goods that depend heavily on energy. The decline in wholesale food prices has not yet made much dent on prices at the corner grocery or at the neighborhood restaurant.
Some prices and many wage scales are down, though. The postal workers are swimming successfully against the tide. So you and I put those little 2-cent extra stamps on our letters.