Even With $25 Billion In The Bank, DeJoy Raises First-Class Stamp To 58 Cents, Announces USPS Layoffs

Even though the U.S. Postal Service has $25 billion in liquid assets and is enjoying a resurgence of its core business as the nation emerges from pandemic lockdown, Postmaster General Louis DeJoy announced Friday afternoon the price of a first-class stamp is going up from 55 cents to 58 cents and an unknown number of managers will be laid off.

The 6.9 percent increase for mailing letters, magazines and marketing materials will go into effect this summer. The move is part of the Trump appointee’s 10-year “Delivering for America” plan in which he declared his intention to make slower mail delivery the new standard and reduce hours and staff.

(Photo by Smith Collection/Gado/Getty Images)

Last year, just in advance of the presidential election – at a time when many Americans opted to vote by mail to avoid crowded polling places – DeJoy ordered the dismantling of numerous automated mail sorters. That move dramatically slowed mail delivery times. USPS on-time delivery scores have not exceeded 90 percent since July 2020. Previously they were significantly north of that number.

More rate increases could be on the horizon. DeJoy has indicated he may look to increase rates for package shipping, a business in which it competes fiercely with UPS, FedEx and Amazon.

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Some experts are skeptical that the Postal Service needs to raise prices to generate revenue in the first place. The agency predicted close to $10 billion in losses in the current fiscal year, but halfway through the marking period, it is only down $448 million.

Marketing mail, a crucial driver of volume that fell sharply in 2020, has roared back as businesses restart advertising campaigns. Volume in April rose 56 percent over the same period in 2020, and revenue jumped 61.2 percent. The agency’s package business also remains brisk. Revenue year-to-date climbed 37.2 percent compared with the year-ago period.

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