In an effort to cut expenses, the U.S. Postal Service is offering to pay employees to retire or resign by the end of the year. This deal, arranged by the union, will offer employees payouts totaling $15,000 over the next two years. The USPS hopes to save $500 million with these job cuts, and is also considering closing mail centers to address further budget concerns; of the 681 national mail centers that may potentially close, 38 are in St. Louis.

With a $6 billion budget deficit, the USPS surely needs an overhaul.  But the USPS has taken the wrong tack. It should be improving its service, rather than simply cutting it. Many businesses and individuals rely on the USPS for important mail; reductions to service fail to address that, instead exacerbating the existing problems. The advent of the Internet has made USPS service redundant in some areas, and a decrease in service would only serve to push its usefulness even farther to the wayside.

With the inevitable decline of USPS service, however, lawmakers need to reduce the legal restrictions that currently hamper other potential mail services. Although the USPS does not receive taxpayer funds, it has essentially been given a regulatory monopoly on certain types of delivery services. Mailboxes, by law, can only be accessed by postal service employees. The Private Express Statutes limit private mail carriers from delivering mail unless it has the proper USPS postage or is “extremely important” and priced at more than $3. These statutes stifle competition and hurt consumers.

Even long before the advent of the Internet and telephones, the USPS was inefficient. In 1844, abolitionist and individualist lawyer Lysander Spooner created the American Letter Mail Company to ferry letters to Boston, Philadelphia, New York, or Washington, D.C., for a third of the price that the USPS charged at the time. New legislation eventually halted his business, but his efforts did force the USPS to significantly lower its rates. The giant postal monopoly of today no longer has to respond to this sort of cost-cutting competition, because federal protection keeps it insulated from those who might provide a similar service more efficiently. Instead, it can get away with practices like paying employees to quit without having to address the real reasons that it cannot make a profit, while private companies like FedEx and UPS are flourishing.

It’s certainly a good idea for the USPS to cut jobs and make its process more efficient, in order to meet its budget constraints. But sustainable efficiency will not occur without real, free-market competition. Simply paying people to quit does not address the growing superfluity of the USPS, and instead makes the mail service slower and more expensive.