Washington Area Women's Foundation

Transportation: Missing Connections

Cars on HwyThe Obama Administration’s Middle Class Task Force released its first annual report last week.  Unfortunately, it missed an opportunity to address the issue of car ownership for middle class families – and for low-income families aspiring to become middle class.

 

 

The report contains a set of hypothetical budgets for two-parent families in the 25th, 50th and 75th  percentiles in income.  For a look at these hypothetical budgets, click here and see Figure 6.  All of these budgets show a higher percentage of the family budget devoted to cars than to medical expenses or saving for college. 

In fact, for two-parent families at the 25th and 50th percentiles, car expenses appear to be higher than any category except housing and an “other expenses” category that includes the cost of necessities such as food, clothing and utilities.  The percentage for car ownership for households at the 25th percentile was especially high.

Similar hypothetical budgets for low-income, single-parent families (mostly headed by women) by the U.S. Department of Commerce (click here to see these budgets) show the same results.  The costs of car ownership for these families outpace every other category except housing and other necessities.

Unfortunately, the Middle Class Task Force’s report did not offer any solutions to this transportation challenge.  Yet we know that for low-income (and minority) households, car ownership is positively correlated with improved access to jobs, higher household income and more weeks worked per year.  For example,  nearly three-quarters (73 percent) of participants in Vehicles for Change, a Grantee Partner of The Women’s Foundation, obtained a better job within six to 12 months of owning their car, and participants enjoyed an average increase in salary of more than $4,500.

While health care, college savings and other pressing expenses receive – and deserve – attention from media and policy makers, these figures show a real need to address the needs of working families for cars.

Let’s hope we can get the task force to look more closely at these issues in the future. If you want to encourage them to do so, you can leave a comment on their website at: http://www.whitehouse.gov/strongmiddleclass/.

John Van Alst is an attorney with the National Consumer Law Center, Inc., in Boston