Cooler but still well above normal this week

MPR News helps you turn down the noise and build shared understanding. Turn up your support for this public resource and keep trusted journalism accessible to all. 

Turn Up Your Support

The cost of a Forever postage stamp has just gone up, under a U.S. Postal Service plan to boost the price of the first-class stamp to 73 cents from 68 cents — a price that was just raised in January. 

 went into effect on Sunday — now the the sixth price hike since January 2021.

Despite the string of increases, the U.S. Postal Service Office of the Inspector General says a U.S. postage stamp remains a bargain in the global marketplace, citing much higher prices in Europe and other areas (more on that below).

 in response to its financial problems. Last year, the 

 credited the agency with making some improvements, but it added that USPS “should continue taking steps to restore its financial viability and Congress should consider additional changes to USPS's unsustainable business model.”

The price of a first-class stamp is cheaper in the U.S. than many other developed countries, according to a recent

ranking by the USPS Office of the Inspector General

The office compared the U.S. to 30 other nations that were selected by country size and postal service revenue, as well as the ability to source reliable data. The list includes much of the European Union, along with countries such as Canada, Japan, Brazil and Russia. 

In raw numbers, only four countries had cheaper stamps than the U.S. And while many postal services have raised prices in recent years, the U.S. increases were moderate compared to most nations in the sample. 

“The price of a [USPS] stamp increased by 26 percent from June 2018 to June 2023 ($0.50 to $0.63),” the inspector general report states, “which is less than half of the average increase for our sample size (55 percent) during that period.”

 — a currency conversion rate used to compare the relative affordability of goods in different countries — the U.S. had the lowest stamp price of the 31 postal services.

 more frequently, and by greater amounts. And inflation is only part of the story.  

“The Postal Service increased the price of [first-class mail] 18 times since January 2000,” according to the OIG report, “and has raised prices more frequently in recent years, increasing prices five times between January 2021 and January 2024.”

The use of first-class mail, the Postal Service’s main revenue driver, has long been in decline. In July 2007, the agency’s volume of single-piece first class mail — things like bill payments, letters and cards — stood at 2.7 billion items. By June 2023, that volume had fallen by 68%, to 900 million.

That’s not to say domestic first-class mail isn't profitable. In fiscal year 2022, its “cost coverage” topped 210 percent, “meaning its generated revenue was more than twice its attributable cost,” according to the inspector general.

But the agency's costs have been rising. So while the cost of stamps was once largely linked to inflation, USPS now uses several criteria in its formula for raising prices, under rules that were eased in November 2020. The pricing equation now includes things like density: The Postal Service's need to deliver less mail — but to more addresses. 

The rate hike also takes into account the agency’s obligation to pay its retirees’ pension and health benefits, an expense that is responsible for more of the new proposed rate hike than is inflation.

“This retirement rate authority is only available for 5 years,” a USPS spokesperson told NPR, adding that 2024 “is the fourth year where the retirement authority would be utilized.”

So, why are U.S. stamps still cheaper than elsewhere?

One glaring reason is scale. The U.S. “is by far the largest market for the delivery of domestic mail,” with the Postal Service “handling half of the world's domestic mail (50.2 percent) in 2021,” according to the OIG. 

While the USPS has seen a long-term decline in use of its main domestic mail product, the drop has been even sharper and more prolonged in other countries. So while the U.S. agency is seeing dramatic drops in volume, it’s better off than Postal Services in many other nations.  

And while inflation has put pressure on many economies around the world, some countries — and their postal customers — have felt it worse than others. In the case of the USPS, the “price of a stamp in the United States was 5 percentage points above the rising costs of goods and services from June 2018 to June 2023,” the inspector general reported. 

Among the other 30 countries in the sample, prices rose by an average of 31 percentage points over inflation in that timespan, according to the report.

Even with the USPS getting new authority to raise its rates a few years ago, the size of those hikes is governed by price caps like the ones mentioned above. But different countries have varying rules to their  postage rate increases, meaning some could raise prices more frequently or in larger chunks than the USPS.

Business and Economic News

Homepage

International

Bill Chappell

Author

U.S. stamps just had their sixth price hike since 2021. In raw numbers, only four countries in a recent study of 31 developed nations had cheaper stamps than the U.S.

The Forever Stamp just went up in price. How does the U.S. cost compare globally?

Go Deeper.

Like this?

News you can use in your inbox