Math in the News: 9/5/11


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In this issue of Math in the News we look at the financial troubles at the U.S. Postal Service. Analysis of financial data from the USPS paints a stark picture of its future.

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Math in the News: 9/5/11

  1. 1. 9/5/11<br />
  2. 2. U.S. Postal Service<br />The U.S. Postal service, originally called the Post Office Department, was formed in 1775. The history of U.S. Postal Service is, in many way, the history of the U.S. itself.<br />That a postmaster General be appointed<br />for the United Colonies, who shall hold his<br />office at Philadelphia, and shall be allowed a<br />salary of 1000 dollars per an: for himself,<br />and 340 dollars per an: for a secretary and<br />Comptroller, with power to appoint such,<br />and so many deputies as to him may seem<br />proper and necessary.<br />That a line of posts be appointed under<br />the direction of the Postmaster general, from<br />Falmouth in New England to Savannah in<br />Georgia, with as many cross posts as he shall<br />think fit<br />
  3. 3. U.S. Postal Service<br />Some very famous Americans have been involved in the U.S. Postal Service.<br />
  4. 4. U.S. Postal Service<br />As the U.S. population has grown, so has the amount of mail generated. <br />This table summarizes the amount of mail handled over the last century.<br />
  5. 5. U.S. Postal Service<br />Here is the graph of the data, which overall shows strong, steady growth.<br />
  6. 6. U.S. Postal Service<br />However, if we focus in on the last thirty years, you can see some flattening in the graph since 2000.<br />
  7. 7. U.S. Postal Service<br />This table shows the Operating Revenue and Operating Expenses over the last century.<br />
  8. 8. U.S. Postal Service<br />Here is the graph of the data.<br />Note that throughout the last century, income barely outpaced expenses.<br />
  9. 9. U.S. Postal Service<br />To see this more clearly, here is a graph of the difference between Revenue and Expenses for the same period.<br />Note that over the past 30 years, the U.S. Postal Service has shown a profit, though a declining one.<br />
  10. 10. U.S. Postal Service<br />Since the 1990’s, when e-mail use began to dramatically increase, the U.S. Postal Service has been profitable, unlike its prior history. But this era of profitability has been temporary.<br />
  11. 11. U.S. Postal Service<br />Notice that since 2006, expenses have overtaken expenses at an accelerating pace. <br />Not only that, revenue has continued to slip.<br />
  12. 12. U.S. Postal Service<br />Why has revenue declined?<br />The overwhelming reason is because of a dramatic drop in the number of pieces of mail sent. During a five-year period over 41 billion fewer pieces of mail were sent out!<br />
  13. 13. U.S. Postal Service<br />Think of reasons why there would have been such a huge drop in mail during this period.<br />
  14. 14. U.S. Postal Service<br />During the same period, expenses dramatically increased, even while revenue was declining.<br />
  15. 15. U.S. Postal Service<br />One way that the U.S. Postal Service has tried to control costs is to reduce the number of employees. Note the dramatic drop in employees during this 5- year period.<br />
  16. 16. U.S. Postal Service<br />Over the next few years, many post offices around the country will close, as another way to control costs.<br />But the challenges the U.S. Postal Service faces are huge.<br />