Stamp Prices Ready to Jump -- Again

Kiplinger reports:

another big hike in the cost of a first-class stamp looms -- to 50¢ from the current 44¢. That follows a 2¢ hike earlier this year. Odds are better than even that regulators will approve an emergency jump next year, as USPS mail volume continues to slump and revenues continue to shrink.

The 2006 postal reform law says that USPS can boost postage each year in line with hikes in the Consumer Price Index in the preceding 12 months, but it provides an escalation clause if the Postal Service is drowning in red ink.

The jump in stamp prices could be averted with help from Congress and the Obama administration, but they remain intransigent. Lawmakers and the White House insist that USPS should continue overpaying around $3 billion a year toward its retirees’ benefits.

The more they raise the price of stamps, the lower their volume. This union driven worker model is too pricey for a declining market.