Ateneo Professor on Entrepreneurship
From Slate by Brian Palmer | Feb 7, 2013
Our knee jerk answer is that government agencies are poor business entitities. Last week, USPS is stopping its Saturday delivery services because the move will save it $2 billion annually. In the fiscal year ended 2012, it lost $l5.9 billion.
Why did it lose money?
l. It was a monopoly;
2. As a monopoly, it was tightly regulated and has to seek approval everytime it changed its business model;
3. It did not cope up the changing time. It sold below cost its then very profitable first class mail service - did not recognize the rising cost of health care cost and fuel.
USPS could be made more profitable if it were privatized and behaved just like a private company. The European mail carriers have been privatized and have teamed up with DHL and have become profitable.
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The post office doesn't make money because it is paying (mostly) imbeciles $23 and $24 dollars an a hour to do a job that requires a $9 per hour brain. The carriers should make a little more than $9 because they possess driving skills or have to walk a lot. Pay them $12. Now were making money!
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