The U.S. Postal Service: 5 studies to know about voting by mail, pricing for Amazon, the role of the mail in public health and more

 
postal service
(Pope Moysuh / Unsplash)
By

August 21, 2020

In the Venn diagram of 2020, the circles labeled “pandemic” and “U.S. presidential election” have fully eclipsed each other. As such, many observers expect the U.S. Postal Service will play an outsized role in how Americans vote come Election Day on Nov. 3. Less than a quarter of voters cast their ballots by mail during the 2016 presidential election, though the percentage of those who vote by mail has risen steadily since 1996, according to the Pew Research Center. That fraction of mailbox balloters will likely jump this year. Because many Americans are concerned about contracting the new coronavirus in potentially crowded indoor voting sites, states are expanding vote-by-mail options.

In coming weeks, the more than half a million people who work for the postal service will provide critical logistics toward maintaining this fundamental democratic process. But the postal service has been mired in financial trouble for years, losing $69 billion from 2007 to 2018, according to the Government Accountability Office, a watchdog agency of Congress. The postal service is not taxpayer funded. It funds itself, with revenue from delivering packages and letters and other services. The 2006 Postal Accountability and Enhancement Act, which required that the postal service pre-fund its retirees’ health benefits, has contributed to the financial strain. So has declining revenue from first-class mail.

The Trump administration has offered mixed messages on relief funding for the postal service, one of the most trusted federal institutions according to a recent survey from Rand Corp., and the president has falsely blamed the service’s longtime financial strain on purported low pricing for Amazon. Postmaster General Louis DeJoy, who since 2016 has donated more than $1 million apiece to Trump’s presidential campaign and the Republican Party and has heavily invested in postal service competitors, has faced scrutiny in recent weeks as images of mailboxes and sorting machines being removed from street corners and post offices swirled online and on television. DeJoy backed off plans to remove more of that infrastructure in the lead-up to the election, though equipment that’s been removed appears unlikely to be returned to operation.

As is often the case, peer-reviewed research can inform news coverage of voting by mail and other issues related to the recent politicization of the postal service. A sample of five studies follows. They are aspirational, imagining postal workers delivering critical healthcare, like vaccines. They show that universal vote-by-mail doesn’t benefit Democratic or Republican candidates. They explore why some voters with mail-in ballots choose to deliver their votes in person, how competitive pricing for companies like Amazon lead to significant revenue streams, and how, for much of the first half of the 20th century, the postal service didn’t just deliver mail — it was a bank.

Keep reading.

America’s Unrecognized Health Workforce: Postal Workers
Michael Pignone. Journal of General Internal Medicine, July 2020.

Michael Pignone, chair of the department of internal medicine at the University of Texas at Austin, provides a brief overview of how postal workers supplement health care delivery — and how they could be redeployed more fully as health care workers in the future.

Mailed stool testing for colorectal cancer is one way Pignone highlights that the postal service already delivers critical health care logistics for patients. He suggests that screenings-by-mail for HIV and hepatitis C could follow suit — and that postal workers could even be trained to deliver vaccines for flu and COVID-19, if the latter becomes available.

“An even more radical re-imagining of the postal carrier as essential health care worker would take advantage of U.S. Postal Service’s unprecedented reach and size to deliver certain elements of care directly to patients,” Pignone writes. “Such a program has been implemented in France as a means of checking in on frail, potentially isolated elders.”

 

Universal Vote-by-Mail Has No Impact on Partisan Turnout or Vote Share
Daniel Thompson, Jennifer Wu, Jesse Yoder and Andrew Hall. Proceedings of the National Academy of Sciences, June 2020.

The authors explore universal vote-by-mail rollouts in California, Utah and Washington across presidential, gubernatorial and senatorial elections spanning 1996 to 2018. California implemented vote-by-mail in 2018, so the authors only have data on the most recent gubernatorial election there.

Universal vote-by-mail means state election departments send every registered voter a ballot, with limited options for in-person voting. The authors find universal vote-by-mail increases voter turnout by 2%, but doesn’t advantage Democratic or Republican candidates in terms of election wins. Despite their results, the authors note they are not implying that universal vote-by-mail should be rolled out nationwide, simply that the evidence they studied shows universal vote-by-mail doesn’t tip the scales to the political left or right.

“Claims that [vote-by-mail] fundamentally advantages one party over the other appear overblown,” the authors write. “In normal times, based on our data at least, [vote-by-mail] modestly increases participation while not advantaging either party.”

 

Choosing the Less Convenient Way to Vote: An Anomaly in Vote by Mail Elections
Andrew Menger and Robert Stein. Political Research Quarterly, December 2019.

Even in states where votes can be cast by mail, voters may still choose to return their ballots to their city hall or other local government office. The authors explore why in three states that conduct all elections by mail — Colorado, Oregon and Washington — roughly two-thirds of voters return mailed ballots in person. Andrew Menger is a postdoctoral researcher at Washington University in St. Louis and Robert Stein is a professor of public policy at Rice University.

“One of the intentions behind the adoption of [vote-by-mail] elections was to reduce the costs of voting, making the process more convenient so that more persons would be able to vote easily,” Menger and Stein write.

They analyze results from a random telephone survey of 1,428 voters in Colorado’s 2014 general election, which included races for all the state’s executive offices and U.S. Senate and House races. The survey asked questions touching on whether voters considered voting in person to be inconvenient to their daily routines, whether they wanted to wait until political campaigns were done to cast ballots, whether voters trusted the postal service and whether they liked the social interaction that comes with voting in person.

“When all voters are considered together, the strongest determinant of how they return their ballot, by mail or in person, is trust in the USPS,” Menger and Stein find. But fewer than 20% of their sample distrust the postal service. A few other factors also play a role in how voters return ballots, conditional on past behavior. Voters who like to wait until campaigning is over are less likely to return their ballots by mail if they are also infrequent voters. Frequent voters who like the social engagement that comes with voting are slightly less likely to return ballots by mail.

“Our findings suggest that different messaging to frequent and infrequent voters might persuade these voters to return their ballots well before Election Day,” they write. “For example, touting opportunities to return mail ballots in person at locations close to voters’ homes provides the frequent voter some of the social rewards of seeing and being seen voting, while assuring that ballots are received in sufficient time to be counted before Election Day.”

 

Does the United States Postal Service Charge Amazon Too Little?
Thomas Barton and John MacArthur. Journal of Business and Accounting, Fall 2019.

About 70% of postal service revenue comes from first-class mail, marketing mail and periodicals. They’re called “market-dominant” services, and demand for them has declined, with $827 million less revenue from first-class and marketing mail by September 2018 compared with the previous year. The rest of the postal service’s revenue comes from package business accounts — like Amazon and even delivery competitors like UPS and FedEx. These are called “competitive” services.

The authors dig into a variety of publicly available data on postal service operating costs, and regulations that govern its pricing. John MacArthur is a professor of accounting and cost management at the University of North Florida. Thomas Barton was an accounting professor there before he died in December 2019.

The postal service offers some rates to Amazon, UPS and FedEx that it doesn’t make public. They’re called negotiated service agreements and they’re largely for last-mile deliveries. That means Amazon will take a package most of the way to its destination using its own logistics networks, then pass off the package to the postal service for the last mile or so of delivery. MacArthur and Barton note the postal service has stated in regulatory filings that no single customer made up more than 6% of its operating revenue from 2016 to 2018.

“It might be speculated that Amazon is the customer that represents about 6% of USPS’s operating revenue,” they write. In 2018, the postal service announced rate increases for its market-dominant and competitive services. By June 2019, the postal service had delivered about 3% fewer packages compared with the previous year — though revenue was up about 5% — because Amazon and others began delivering more packages using their own transportation networks. Around the same time, FedEx ended its domestic air shipping contract with Amazon, a development that “should increase opportunities for USPS and other shipping organizations to deliver more packages for Amazon.”

“It is vitally important that the USPS continues to be competitive in its pricing for ‘last mile’ parcel services or it will quickly lose significant sales volume that generates a positive contribution margin,” MacArthur and Barton conclude. “It does seem that the concern expressed over the pricing of USPS competitive products is more appropriately directed towards the declining market for its market-dominant products.”

 

An Empirical History of the United States Postal Savings System
Steven Sprick Schuster, Matthew Jaremski and Elisabeth Ruth Perlman. National Bureau of Economic Research Working Paper, May 2019.

From 1911 to 1967, the U.S. Postal Savings System provided a way for Americans to save money with the full backing of the federal government at a time when bank deposits weren’t federally insured. It’s an idea that’s gained traction in recent years as a way to provide basic banking services to the unbanked and underbanked, since communities with a dearth of banking options are likely to at least have a post office. Underbanked households are those that have a checking or savings account but still use alternative financial services, like check cashers.

Other studies look at how the system developed and competed with commercial banks. The authors of this paper explore, for the first time, what kinds of people used the system.

“In the program’s early years, Postal Savings was heavily used for short-term deposits as well as by foreign-born people, who avoided traditional banks,” the authors find. The system “served many marginalized groups, such as immigrants, who were often distrusting of traditional banks, and were more likely to live in mining communities, where banking options were scarce.”

Through World War II, wealthier people turned to the system, which offered 2% interest rates, to earn decent returns during a time when interest rates writ large were low, to allow for cheaper wartime government debt spending. During its existence, the system was “at least a partial substitute for banks,” the authors find. Those and other historical lessons emerge for those who support postal banking.

“The fixed interest rate of the historical system bound the hands of the System’s administrators and led to the dominance of wealthy depositors rather than the targeted demographics,” the authors write.

Want more information on casting ballots by mail? Learn about the real — and false — risks of mail-in voting.

 

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