USPS Price Increases: No Big Deal since 1971

The recent announcement that the rate for United States Postal Service first class, 1 ounce stamps is going up from $.41 to $.42 in May 2008 has everyone reminiscing. I myself remember when a stamp was 8 cents…I think it had Eisenhower on it, if I recall. Now, 42 cents sure seems like a lot more that 8 cents, but actually it is exactly the same! If corrected for inflation, an 8 cent stamp in 1971 would be worth in 2007 exactly…you guessed it…42 cents!

Observe the graph, and you will see that the price of a first class stamp has remained somewhere between 40 and 55 cents in constant, 2007 dollars since 1971. (We are using 2007 dollars because that’s what the inflation calculator tool I used uses…and it’s a good frame of reference because we all have a sense of what 2007 was like financially, 2008 is still too new!) Once we get past the inflation spikes of the late 70’s, there’s one recent outlier in 1999 where it came in at 52 cents. Not sure what happened there. But aside from 1999, since 1985 it has been a very steady 41 to 45 cent range, and a very steady 41 to 43 cents since 2001.

I think the USPS is doing a pretty good job keeping costs reasonable.

Props to Five Cent Nickel’s post on the subject for the idea for this post.

This graph uses this Inflation Calculator . Postage data is from a graph linked in this news report