Policy

Which Comes First: A $1 Postage Stamp, or a Chicago Cubs World Series?


Which Comes First: A $1 Postage Stamp, or a Chicago Cubs World Series?

Photograph by Jim Krantz/Gallery Stock

The U.S. Postal Service, fresh off a decade of rapid stamp price inflation, is at it again: It wants to raise the price of first-class stamps, to 49¢ from 46¢.

If this 6.5 percent increase takes effect next year, letter senders would be looking at a 10¢ gain in just eight years. It’s not your imagination: The last 10¢ gain took almost twice as long (1991 to 2006). As costs go up, and more quickly, the onetime ridiculous question may be worth asking: How long before a stamp costs $1?

The price of stamps almost never increased until 1958, when they jumped by a penny to 4¢—the first change in 26 years. Since then the price has gone up every two years, on average. Using historical prices as a guide to forecast the future, we get this chart:

Data: Bloomberg

According to this basic analysis, we should expect to see $1 stamps around the year 2030—the year Chelsea Clinton turns 50, incidentally. It all depends, of course, on funding, politics, policy, and, to some degree, inflation. In 2013 dollars, the price of a stamp has been well above 40¢ for more than 40 consecutive years.

Will the USPS even be around long enough to get there? Will the Cubs ever win the World Series? Maybe so. A lot can happen in 17 years.

Eric-chemi
Chemi is head of research for Businessweek and Bloomberg TV.

Steve Ballmer, Power Forward
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