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.
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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