Last week Congressman Raúl M. Grijalva (D-AZ) announced that he would re-introduce legislation that would prohibit the Postal Service “from closing or consolidating any post office or other postal facility that is located in a ZIP code that has a high rate of population growth.”
The bill “directs the Postmaster General to determine annually whether a ZIP code has a high rate of population growth using population data available from the Bureau of the Census.”
When Congressman Grijalva first introduced this legislation back in 2012, it went nowhere. But without such a law, the Postmaster General is not likely to ask the Census Bureau for this kind of information. In fact, the Postal Service has previously expressed an unwillingness to consider census data when making decisions about closing postal facilities.
When the Postal Service was planning to close 3,700 post offices under the Retail Access Optimization Initiative (RAOI) back in 2011, a USPS witness told the Postal Regulatory Commission that economic and demographic profiles, as available through the census, would not be considered when deciding which facilities to consider for discontinuance. (PRC Advisory Opinion, p. 76)
Some of the witnesses for the RAOI Advisory Opinion did, however, look at census data, and one of them (Professor Anthony Yezer) recommended that population growth be considered when evaluating the demand for postal services in each community. (PRC Advisory Opinion, p. 79)
While considering growth rates may make business sense, it's not at all clear that this is a good idea. The losers would probably be rural areas, economically depressed regions, and communities that, for one reason or another, aren't growing rapidly. Why should these places lose their post offices? They're apt to be the places that need them the most.
Nonetheless, Grijalva's legislation raises some interesting questions about the relationship between census data and the shape of the postal system. In particular, it leads one to ask, What effect might the legislation have on closing post offices and processing plants?
Post offices and census data
In order to answer this question, it’s necessary to consider what a “high rate of population growth” might mean. This is not an official census category, so one can only speculate.
The population of the U.S. in 2000 was 282.2 million. By 2013, the population had grown to 316.5 million. That’s an increase of 12 percent. One might say, then, that a “high rate of population growth” would be something above the national rate.
How many ZIP code areas would this encompass?
The census website provides data sets that give the population in 2000 and 2013 for each of 33,300 5-digit zip code areas in the U.S. and territories. We’ve used the data to create a table showing the population in 2000 and 2013 and the rate of growth for this period for every ZIP code. You can see this table here. (Note that there have been some changes in the ZIP codes during this period, so there are a few anomalies in the table.)
Overall, about 9,500 of these ZIP code areas (29 percent of the total) have experienced a population growth of more than 12 percent. If that were the benchmark, the Grijalva legislation would prevent closures in these areas.
There are other ways, however, to look at the question of what constitutes a high rate of growth.
For example, about 13,450 of the 5-digit ZIP code areas (41 percent of the total) experienced a population decline from 2000 to 2013. About 17,500 (almost half) experienced either a decline or an increase of less than 5 percent.
If anything more than 5 percent were considered a high rate of growth, half the country’s post offices could not be closed under the Grijalva legislation.
Plant consolidations and census data
At this point in time, mass closures of post offices do not seem to be on the Postal Service’s agenda. What is a matter of controversy, however, is the consolidation of about 80 mail processing plants, the so-called phase 2 of the Network Rationalization plan that began in 2012. How might the Grijalva legislation impact these consolidations?
In order to consider this question, it’s necessary to go beyond the growth rate for individual 5-digit ZIP code areas and to look instead at the growth rates for the areas served by each plant. One way to do that is by examining the data for 3-digit ZIP Code prefixes , which are served by about 450 Sectional Center Facilities (SCF), i.e., the plants that process the mail.
Using census data, this table presents the population data for 2000 and 2013, as well as the growth rate during this period, for 887 3-digit ZIP code areas. The median growth rate for 2000 to 2013 was 4.7 percent. About 200 of the areas had a growth rate greater than the national growth rate of 12 percent, and about 430 had a growth rate greater than 5 percent.
There are about 450 SCF plants. This table shows the population in 2000 and 2013, along with the growth rate, for the area served by each plant. (To do this, the table adds the population figures for all of the 3-digit ZIP code prefixes served by each plant.)
About 95 of the plants serve an area that has a growth rate more than 12 percent, and about half have a growth rate greater than 5 percent.
Focusing just on the 80 phase-2 plants for which the consolidation is currently on hold, we find that 14 had a growth rate more than 12 percent, and 40 had a growth rate more than 5 percent.
Congressman Grijalva is particularly concerned about the pending closure of the Cherrybell plant in Tucson, which he represents. The area served by this plant has grown in population from 1,012,093 in 2000 to 1,095,883 in 2013, an increase of 8.3 percent. Even though this growth rate is below the rate for the country as a whole, it could still be enough to view the area as having a high rate of growth. Were the Congressman's proposal to become law, it might prevent the closure of the Cherrybell plant.
The Postal Service's use of the census
Of course, the census reports on much more than simply population figures. The census website contains a huge amount of data about many other variables, including economic indicators like the number of business establishments and employees in each ZIP code area (as seen in this table).
Behind the scenes, the Postal Service uses census data in various ways, including the production of its official revenue, pieces, and weight (RPW) reports. But it’s likely that the Postal Service could be using the census even more.
For example, a 2012 USPS OIG report about how the Postal Service estimates mail processing costs found that “using census data to determine mail processing labor costs per piece would enable the Postal Service to reduce 61,574 [manual] data collection readings a year, resulting in net savings of $4.29 million over a 10-year period.”
On the other hand, consider another OIG audit report released today entitled “Utilization of Data by the Chief Operating Officer and Executive Vice President.” This report examines ”whether the COO effectively uses internal and external business data to manage business activities and mitigate risk.” The report doesn’t even mention the census.
While Congressman Grijalva’s proposed legislation is likely to meet the same fate as it did when he first proposed it in 2012, it does raise a good question: How might the Postal Service make better use of census data? Perhaps there’s something for a future OIG report to consider.