Spend

Here's who may be impacted by the post office slow down

A USPS worker wearing a mask puts envelopes in a mailbox while driving past as the state of New Jersey continues Stage 2 of re-opening following restrictions imposed to slow the spread of coronavirus on August 13, 2020 in Ventnor City, New Jersey.
Alexi Rosenfeld | Getty Images Entertainment | Getty Images

The new leadership of the U.S. postal service has come under fire from lawmakers and advocates who worry that a slower mail system will affect the presidential election in November. But the impacts could disrupt everyday life for Americans in many other ways.

The U.S. postal service, which has suffered from financial troubles for years, has lost billions of dollars amid the coronavirus pandemic. But last month, new Postmaster General Louis DeJoy issued a number of orders aimed at cutting costs within the agency. Those changes include eliminating employees' ability to log overtime and barring workers from making extra trips to deliver late-arriving mail. DeJoy's changes have been blamed for reported widespread mail delays.

"Let me be clear about the reasons behind our restructuring and the need for our plan. Our financial condition is dire," DeJoy said in a memo sent to USPS staff on Thursday, NBC reported. "Our critics are quick to point to our finances, yet they offer no solution."

Democrats have pointed out that while DeJoy was not directly appointed by President Trump, he is a major Republican donor. They have questioned his motives for the changes ahead of an election that may see an uptick in mail-in ballots.

President Trump has said he refuses to bail out the agency (the postal service does not receive any federal tax dollars) because he fears mail-in voting would lead to widespread election fraud. Election experts have said those claims do not have merit. 

Senator Elizabeth Warren (D-Mass.) called the post office cuts "fundamentally wrong" during an appearance on NBC's TODAY Show on Monday. "People depend on the post office. We're depending on it for our democracy, for votes," she said. "This idea that Donald Trump is going to do everything he can to destroy the post office because he knows he's losing this election, this is fundamentally wrong. We all see what's happening here."

Seven U.S. senators, including Warren, sent a letter on Monday to the members of the Postal Service Board of Governors asking the body to immediately reverse DeJoy's changes and should he not cooperate, remove him. Speaker of the House Nancy Pelosi (D-Calif.) said Sunday that she is calling the House back into session early to vote on a bill that prohibits the recent changes to the postal service. 

Impact of slow down goes beyond elections

As Warren pointed out on Monday, and many others have also noted, that there's more than just election issues at play if the U.S. postal service slows service. "People also depend on it for retirement checks, their Social Security, people depend on it to get medication through the mail," Warren said. 

On average, the Postal Service processes and delivers 472.1 million pieces of mail each day. Here's a look at how several different types of programs and businesses may be impacted by the anticipated slow down of the U.S. postal service. 

Prescription medications: People could experience delays getting their medications. While brick-and-mortar pharmacies are still the leading way most Americans get their medications filled, the number of people using mail order services is rising, especially amid the pandemic. In March, the number of mail-order prescriptions grew by 21%, according to SunTrust pharmaceutical analyst Gregg Gilbert. As of last week, mail-order prescriptions accounted for 5.1% of the market. 

E-commerce: The postal service has seen a dramatic surge in the number of packages from online shopping since the start of the pandemic. From April to June, the post office's package volume increased by 708 million packages, up about 50% from last year. The agency expects this trend to continue "given the surge in e-commerce as many Americans stay home due to the Covid-19 pandemic," according to the postal service's third quarter results.

A slow down would impact some companies more than others. About 91% of Etsy sellers rely on USPS to ship their products to customers, for example, according to a July 22 letter the company's chief executive Josh Silverman wrote to Congress.

Small business owners: About 70% of micobusinesses, those with less than 10 workers, use the post office at least once every six months, according to a 2019 report by the USPS Office of the Investigator General. These small businesses spent an average of $359 a month and over half, 56%, say they use USPS most frequently to ship, the report found.

Stimulus checks: When Congress passed the CARES Act in March, the coronavirus relief package provided funding for stimulus payments of up to $1,200 to individuals. While the vast majority of Americans received their payment via direct deposit, the U.S. government did sent out nearly 35 million paper checks and 3.7 million debit cards, according to a report from the House Ways and Means Committee.

Congress has yet to pass any additional relief packages, but the Republican-led proposed legislation does include a second round of stimulus payments that may be delayed for those receiving the benefit by mail. 

Social Security: A majority of those receiving Social Security benefits will likely see little impact. Starting in March 2013, the agency phased out mailing paper checks except for rare exceptions. Instead, most recipients get their benefits either through direct deposit or by Direct Express debit card. Today, the agency pays about 98% of Social Security and Supplemental Security Income (SSI) benefits, about 71.6 million, electronically each month, though it does still mail nearly 850,000 paper checks, spokesman Mark Hinkle tells CNBC Make It.

Additionally the Social Security Administration annually mails about 15 million paper statements to those age 60 and older who do not receive Social Security benefits and do not have an online my Social Security account.   

Check out: The best credit cards of 2020 could earn you over $1,000 in 5 years

Don't miss: Trump's executive orders didn't include a second round of stimulus checks—here's why

VIDEO3:1803:18
Trump: Post Office needs to raise prices for Amazon
make it

Stay in the loop

Sign Up

About Us

Learn More

Follow Us

CNBC.COM