Driving to Work - Doing Good for Our Economy

Sunday, February 28, 2010 | Margy's Blog & Updates


Our official research arm – the GAO – just released a new report about access to driving and license suspension. Thanks to Representatives Pete Stark, Jim McDermott, and Gwen Moore for their interest in the impact of state policy and practice on local economic conditions and economic license suspensions!

Mobility Agenda readers know that we encourage policy-maker focus on access to driving and the impact of license suspension on communities, employers, and workers. We’ve hosted a national roundtable and published our research on economic license suspensions. Read more about this topic here.

We’re pleased to see this interest in Congress. Read the report to learn more about promising alternatives to suspension in some places. 

Low-wage workers with access to a reliable car are more likely to work, earn more, and work more hours. So, lack of a driver’s license is a barrier to work. In addition, some jobs – especially in construction and health care – require a license of all applicants. For workers without a license, jobs may be inaccessible because a license is a prerequisite, or because a car is the only means of access to a job far from home. The most common reasons for license suspension and revocation are for non-driving offenses, as states have moved to use the license as a means to enforce other goals and raise revenue. The Mobility Agenda studies strategies to reduce the impact of license loss for economic reasons.



Pay-As-You-Drive Car Insurance

Thursday, March 20, 2008 | Margy's Blog & Updates

The cost of car insurance can be a major barrier to driving. And we know that people with access to a reliable, affordable car are more likely to be employed, earn more, and work more hours. We also know that low-wage workers drive fewer miles than higher income people, which makes transportation to work a regressive tax on employment. (For much information more on transportation and work, see our resource page on transportation and the labor market.)

Recently, we’ve been monitoring efforts in a couple states to reduce the cost of car insurance and we found this new article about pay-as-you-drive car insurance in the popular journal Democracy intriguing.

Pay-As-You-Drive Car Insurance
by Jason Bordoff

If you’re like most Americans, you eat too much at all-you-can-eat buffets. With auto insurance, it’s no different. Drivers who are similar in all respects—age, gender, driving record—pay roughly the same premiums whether they drive 5,000 or 50,000 miles per year, even though the likelihood of a collision increases with each mile. This “all-you-can-drive” pricing scheme imposes significant costs on society: more traffic accidents, congestion, air pollution, greenhouse gas emissions, and dependence on oil. It’s also inequitable, as low-mileage drivers, particularly low-income people and women, subsidize high-mileage drivers.

Read More.

Sub-Prime Car Lending Problems Surface...and "Soar"

Monday, March 10, 2008 | Margy's Blog & Updates

We’ve been studying sub-prime car financing for a couple of years. This issue has been largely off the radar in the mainstream media, but we’ve noticed more attention lately, as defaults increase.

From a blog cross-posted at the Reuter’s website:

Fitch Ratings, a credit rating company, reported today that the number of auto loans at least 60 days delinquent has hit a 10-month high in January, jumping 12% from December 2007 and 44% from January 2007. Overall, 0.77% of prime and subprime auto loans in the US were delinquent in January 2008.

Subprime delinquencies (for less-credit-worthy consumers) were 4.03% in January, up 10% from December 2007 and 43% from January 2007. They are at the highest rate since late 1997.

Auto loan delinquencies are on the upswing for many reasons, but among them are the more lenient credit standards in previous years, coupled with the housing slowdown and the possibility of a recession. Hylton Heard of Fitch said other than consumers receiving their tax refunds in the coming months, there appears to be little likelihood of this trend changing in the coming months.

(My emphasis.)

The Annie E. Casey Foundation recently produced a documentary outlining the issue of car financing for low-wage workers. The video is now available online and is accompanied by a discussion guide.

You can find more information about the video, and other resources, on our new car financing page. You’ll also find selected news reports about this issue too.