Elon Musk Wants To Privatize the Postal Service: What That Could Mean for Your Wallet
Written by
Kerra Bolton
Edited by
Rebekah Evans
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Privatizing the United States Postal Service (USPS) is a popular target for government efficiency proponents like wealthy billionaire Elon Musk.
Speaking virtually at a media and telecom conference earlier this year, Musk said to CNN, “we should privatize anything that can be privatized.”
The 250-year-old independent service experienced a net loss of $9.5 billion last year, up from $6.5 billion during the previous fiscal year, according to a report on USPS’s website. In addition, most people now communicate and pay bills online.
Is USPS draining public dollars or is it needed more than ever now? Musk wants to privatize the postal service. What could that mean for the economy and your wallet?
Also find out how much DOGE could save you.
Why USPS Matters
According to CNN, supporters said the USPS is the most affordable way to ship things and plays a key role in American daily life. Privatizing the mail would also mean the end of guaranteed mail service.
“The USPS serves every address in our nation, delivering vital communications and documents and medicines,” said Keith LaShier, president of the Association of United States Postal Lessors (AUSPL). It is a trade group that represents landlords who lease buildings to the U.S. Postal Service.
“It also plays a critical role in supporting the elections of our local, state and federal government leaders,” LaShier said.
What Could Change
Since Musk’s remarks in March, AP News reported that the outgoing Postmaster General Louis DeJoy agreed to partner with Musk’s Department of Government Efficiency (DOGE) to cut 10,000 employees and assist in identifying and achieving “further efficiencies.”
“Universal service never meant every post office would be profitable,” LaShier said. “Yet a first-class stamp costs the same regardless of the distance the letter travels. Congress understood that the busiest post offices would support the smallest to ensure mail is delivered timely to all corners of the nation.”
The United States Postal Service has been an independent agency since 1970. Most changes to USPS are normally subject to Congressional approval.
“Congress has protected the universal service mandate because it recognizes the value of the network of facilities to business, public safety and the machinery of democracy,” LaShier said. “It used the same approach to create the Tennessee Valley Authority to deliver electric service to rural America, an interstate highway System to link all 50 states and an initiative to deliver broadband internet service to areas of the country that lack it.”
However, according to news reports, the Trump Administration plans to disband the USPS Board of Governors and place the agency under the federal Commerce Department as the first step in privatizing the service.
Who Pays
The potential privatization of USPS could significantly alter how Americans access affordable mail and delivery services. From rising costs to reduced access in rural areas, everyday consumers may shoulder the burden of reforms aimed at efficiency.
“Package delivery remains USPS’s fastest growing business sector and those private delivery companies acknowledge they could not manage first mile or last mile service without USPS,” LaShier said.
Higher Mailing Costs: Privatization often shifts the focus from public service to profit. That could drive up prices for everyday services like shipping, bill pay and package delivery, which disproportionately affect low-income households that still rely on USPS for most deliveries.
According to a Wells Fargo report, USPS rates were 25 to 60% lower than private carriers like FedEx and UPS.
Reduced Access: Rural communities and underserved city neighborhoods could see post office closures or reduced hours. This could limit access for individuals without reliable internet access to government services, prescription drugs and voting by mail.
Fewer Consumer Protections: As a public agency, USPS is bound by federal service mandates. However, a privatized system could be less accountable and have less emphasis on universal service and affordability.
The Price of Privatization
USPS is essential to local economies, especially in rural and underserved regions. Privatization efforts could disrupt job markets, strain small businesses and weaken the nonprofit sector’s ability to serve communities.
Nonprofits and Small Businesses: Many organizations rely on USPS for bulk mail and low-cost shipping. Sudden changes in service pricing or reliability could force them to raise prices, reduce operations or switch to more expensive private carriers.
Job Market Impact: Eliminating thousands of postal jobs could have a broader economic impact, especially in communities where USPS is a major employer.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
More From GOBankingRates
Sources:
- USPS, “U.S. Postal Service Reports Fiscal Year 2024 Results.”
- U.S. Mail Not For Sale, “USPS Privatization: A Framework.”
