There aren't many people alive today who can remember the last time the Postal Service made it cheaper to buy a stamp. Yet this week, the cost to mail a letter declined to 47 cents, the post office's first such decrease in 97 years.
For most of the 20th century, a stamp for a first-class letter weighing an ounce or less cost just 2 or 3 cents. The last reduction came after World War I, when the government again began charging customers the peacetime rate of 2 cents a stamp. The first year that the price exceeded a dime was in 1975, according to the Postal Service's historian.
Since dimes today are worth less than pennies were during the Great Depression, the real cost of sending mail is now about the same as it was in 1932, when regulators increased the price of a stamp from 2 cents to 3 cents. The gradual increase in prices throughout the economy reduced the value of those 3 cents through the years, until postal officials began rapidly raising the price of a stamp in 1958.
For about the past four decades, the real cost of a stamp has remained about the same -- between about 40 cents and about 50 cents, in terms of last year's dollars.
The recent decrease follows the expiration of an emergency increase imposed in 2014. It was a temporary measure to shore up the Postal Service's finances, and now lawmakers and postal officials will have to find other ways of funding mail delivery. The reduction in price will reduce the service's revenue by about $2 billion this year. That's on top of a $5.1 billion loss last year.
The Postal Service's real problems are more political than financial, however. Also, the service's revenue last year exceeded the actual cost of delivering the mail by $1.3 billion -- the losses came from an unusual law that requires postal workers' retirement benefits to be paid for in advance. There appears to be bipartisan support for legislation in the Senate that would give the Postal Service more flexibility in organizing its business, as The Washington Post's Joe Davidson reported.
That bill would increase the price to 49 cents again. Now is a good time to buy stamps.