The ZIP Code at 50

It's been 50 years since the Postal Service first introduced ZIP codes. At first, the reaction wasn't necessarily welcoming. Consider this Peanuts strip from the fall of 1963:

95472 was Schulz's ZIP code, by the way

As it's turned out, however, the larger meaning of ZIP codes has very little to do with how the mail is delivered; rather, a ZIP code's larger meaning is demographic:

“The post office built this system of little geographical areas and laid it down on a map of the United States and it made sense for delivering mail,” said Jay Coggins, an applied economist at the University of Minnesota. “And it turned out to be a very convenient way to measure all sorts of socioeconomic and health numbers.”

Banks and insurers now use ZIP codes to analyze mortgage risk and set premiums, real estate firms use them to organize listings and retailers use them to decide where to build new stores. A recent analysis by the Postal Service’s Office of the Inspector General and IBM estimates the annual value of ZIP codes at $9.5 billion.

The largest benefits are enjoyed not by the post office or large-scale direct mailers, said Jeff Colvin, a research director at the Office of the Inspector General.

“People outside the Postal Service and even outside the mailing industry seemed to get more benefit over a long period of time than the savings to the Postal Service and to people who do mail-related stuff,” Colvin said. “It was really people outside of that who used the division of the country into ZIP codes for all kinds of purposes to organize their own businesses.”

You can learn quite a lot from ZIP codes, actually. Over the course of my life, I've lived in the following ZIP codes:

60804   Cicero, Illinois
54911   Appleton, Wisconsin
54914   Appleton, Wisconsin
54915   Appleton, Wisconsin
53511   Beloit, Wisconsin
60304   Oak Park, Illinois
55105   St. Paul, Minnesota
55126   Shoreview, Minnesota
55112   New Brighton, Minnesota

I'm pretty sure that Cicero had a different zip code when I lived there, but my parent's apartment would now be in 60804. These days, the 60804 ZIP code is an area that is primarily Hispanic:

It's also a place with young people and, not surprisingly, annual income is not very high, either:

Below average

When I was a young man, I moved back to the Chicago area for five years, to an area that is essentially adjacent to 60804, but is very different, at least economically. That would be Oak Park, Illinois, with the ZIP code of 60304:

There are a lot less people in 60304 than in 60804, and those who are there are much more affluent, too:

Above average

These days, I live in the 55112 ZIP code, which is pretty close to average for Minnesota. Demographically, it's not especially diverse:

Not exactly a melting pot

And incomes are, well, average:

We are generic

If you study the numbers, the most affluent place I've lived is the 55126 ZIP code, while the poorest was 60804, although 53511 (Beloit, Wisconsin) is not significantly higher. There are reasons for all this, of course -- Cicero, Illinois has never been a particularly wealthy area and has generally been a place where people start out and move up when they can. Although I spent more than 20 years outside of the Chicago area, I would imagine that I was hardly the only person who once lived in 60804 who was able to move to 60304, only a few miles away, yet have a significantly better standard of living.

Similarly, 55112 and 55126 are adjacent areas, but there's a significant difference in income. Households in 55126 have a median income about $20,000 higher than their neighbors in 55112. For most people, the difference isn't that stark, but it's significant. And because 55112 and 55126 are mostly in the same school district, you see some interesting differences between the two high schools in the district. If you want to see the difference in a concrete way, check out the student parking lots at Mounds View (located in 55112, but serving mostly kids in 55126) and Irondale (serving primarily 55112 kids). You'll see a very different assortment of vehicles in the lots.

Charles Schulz sensed something important was happening in the fall of 1963 when he introduced the character "555 95472." He didn't know the half of it. All those numbers tell stories. And in case you're interested, the income levels in 95472 aren't that much different than 55112. The price of a home in 95472 is triple that of 55112, however, and those costs have a pretty large effect on how people live. But that's a different post.