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Owning a Car Is Integral to Climbing the Economic Ladder

Outside many U.S. cities, long commutes can mean even lower income for poor Americans.
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/ Source: NBC News

Without a car, the routines of everyday life in America become a constant juggling act for the wheel-less who have to rely on a patchwork of buses, lifts from friends and walking.

Everything — commuting, ferrying kids to and from after-school activities, running errands to stores — takes longer and, in a country where "time is money" is a mantra, the longer commutes can mean people are stuck on the lower rungs of the economic ladder. You need wheels to climb out of poverty.

Samuel Wallace used to wake up at 5 a.m. to leave his home before dawn and travel 20 miles to his job as a school aide for autistic kids — a two-hour trip. “I had to walk three blocks to the bus stop, take two buses and then walk two more blocks to work,” the Baltimore native said. “In the wintertime, it was rough.”

Wallace, a 41-year-old single father without a car, couldn’t get to his son’s sports events or pick up a second job on weekends.

Then in December, Vehicles for Change, an organization that sells donated cars at a low cost to families in need, sold Wallace a 1998 Subaru for $750. By January, his commute dropped to half an hour and he began helping carpool for his son’s basketball league. He got a second job working in a group home for developmentally disabled adults on weekends, boosting his income by around $500 a month. “It just helps because I can go from one place to another place and maybe pick up hours during the week,” he said.

Wallace’s story is typical, said Vehicles for Change founder and president Marty Schwartz. “Typically, families within the first year get better jobs, and they’re bringing their kids to activities they’ve never been able to attend before,” he said.

“Academic literature is pretty compelling — and mounting — that cars make a huge difference in the lives of low-income families.”

America’s attachment to cars shapes everything from the country’s economy to its public policies to the layout of our communities, and not being able to afford a vehicle is a uniquely challenging hardship.

“In New York City, maybe you don’t need a car, but if you live in the middle of the U.S., especially in a rural area, there’s no cab company, there’s no bus that takes you anywhere,” said Terry Franz, founder of Cars 4 Christmas and Cars 4 Heroes, two of just a handful of programs around the country that take donated cars and give them to low- to moderate-income families in need.

But even in places with good public transit, the burden of transportation is borne more heavily by those of lower-income and the working poor. A March report published by the New York City Comptroller’s office found that New Yorkers spend, on average, nearly six and a half hours a week commuting, while a handful of fairly low-paying jobs — security guards, maids, housekeepers, nursing and health aides — have the longest commutes.

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“It’s an additional layer of stress on top of everything else lower-wage workers have to face… when you’re trying to actively pursue a reliable means of transportation,” said Asley Orr, executive director of the Good News Mountaineer Garage, another organization that provides cars to lower-income households.

“Academic literature is pretty compelling — and mounting — that cars make a huge difference in the lives of low-income families,” said Evelyn Blumenberg, a professor of urban planning at University of California, Los Angeles.

In follow-up surveys with recipients, the Good News Mountaineer Garage found that 70 percent of recipients who had been on public assistance were able to get off it, and 80 percent of recipients were working.

Enriching kids' lives

Cars give families access to better medical care and supermarkets rather than convenience stores. With a car, parents can enrich their kids’ lives by taking them to visit a museum, see a play or attend a sporting event. “I just see a ripple effect on all these things of the one key indicator of having reliable transportation,” Orr said.

But cars are expensive, and many of the people who would benefit most from a car can’t afford one. “The need is greater, and I’ve watched it grow year after year,” Franz said. “The economy’s not as good as it used to be. People are struggling. They can’t afford car payments.”

“Average used car prices are at $16,000 or so. Even with relatively low with rates for folks with good credit, that’s still a lot,” said John van Alst, director of the National Consumer Law Center’s Working Cars for Working Families Program.

According to data from Experian Automotive, the average dollar amount and duration of both new and used car loans are climbing. The average new-car loan amount hit $28,381 in the fourth quarter, an all-time high, and the average used-car loan rose by more than $400 over the last year to $18,411.

“In most parts of the country, vehicles are viewed as a necessity to everyday life, which is why we continue to see consumers willing to take out larger loans as the average price of vehicles continues to rise,” Melinda Zabritski, Experian’s senior director of automotive finance, said in a statement.

Lower gas prices help make even older, less fuel-efficient cars cheaper to drive, but maintenance and insurance can be significant hurdles. A study conducted last year by the Consumer Federation of America found that in more than a third of the nation’s lowest-income zip codes, where the average driver earns less than $21,000 annually, bare-bones insurance for a driver with a clean record costs more than $500 a year.

Repairs can also sink a family living paycheck-to-paycheck. Wallace is setting aside $20 from every paycheck to have a cushion in case the Subaru needs repairs down the road. For people in precarious financial situations, even routine expenses like replacing tires can be enough to start a downward spiral into debt.

The Modest Needs Foundation, a nonprofit that hosts a platform for crowdsourced, small-dollar grants given to people in need, says about 40 percent of its requests are related to car maintenance or repairs. “If you can keep somebody working and productive for $600 or $700 by fixing their car, that’s a whole lot better than the alternative,” said president and executive director Keith Taylor.

A financial slide

In a 2013 study of its results, the group found that, among people to whom it had provided grants, 94 percent said the assistance had solved their problem and kept them on track for a year or more. Of those that requested assistance and didn’t get grants, just over half reported a financial slide that ultimately ended in homelessness.

Most Americans have always depended on cars, but the problem is more acute today, as both affordable housing and employment drift into the suburbs. "Most work-related travel now is from suburb to suburb,” Blumenberg said. “As employment disperses, as households disperse, cars are more convenient and more flexible.”

Not only is it hard for public transit to serve widening geographic footprints, but there also is a greater need for transportation outside of traditional commuting hours. The service jobs that have disproportionately characterized the low end of the labor market recovery often require odd hours when buses and trains don’t run.

“Access to transportation… is a symptom of the real issue, which is that the workforce is changing,” Taylor said. “There are a whole lot of people working a lot of part-time jobs trying to keep their heads above water.”

Taylor said that while he used to see more single-income households and people with full-time jobs applying for Modest Needs grants, today’s needy often work multiple part-time jobs and still don’t have enough financial security to weather a blown radiator or rusted muffler.

“It’s becoming increasingly more difficult for people to have a good solid full-time job that pays enough to be able to pay the bills,” Taylor said. “That’s the larger issue here.”