Driver's License or Good Citizen's Card?

Tuesday, December 02, 2008 | Margy's Blog & Updates

We have said it before – access to driving is crucial for good jobs, healthy communities, and a strong economy. In June we published “Access to Driving and License Suspension Policies for the Twenty-First Century Economy,” highlighting the negative economic and social impacts of license suspension policies. People are taking notice. 
 
 
Sreya Sarkar, Director of the Asset Ownership Project at Cascade Policy Institute, wrote the following article featured today in Oregon’s Statesman Journal:


   

Driver’s license or good citizen’s card?

 The driver’s license was originally created to ensure public safety by setting standards for driving competency. Accordingly, license suspensions were a legal mechanism to remove unsafe drivers from the road. 

But in the last fifteen years, federal and state lawmakers have viewed the license as a “good citizen” trophy and sought to suspend it for a number of non-driving-related reasons.

The list of non-driving misdemeanors resulting in license suspension includes failure to pay parking fines and failure to appear in court, even for reasons completely unrelated to driving. State agencies are increasingly using driver’s license suspension to enforce laws and public policies that have nothing to do with driving or even motor vehicles. The problem is that suspension of driving privileges makes it much more difficult to keep or find a job, and thus makes it even harder for individuals to comply with whatever rule was broken in the first place.

In Oregon, as in many other states, more than fifty non-driving-related offenses can lead to a driver’s license suspension. Some typical non-driving-related reasons that lead to suspension are: failure to comply with court orders, failure to appear in court, failure to pay child support, and failure to pay certain fines.

In a recent report, the Mobility Agenda (a Washington D.C.-based think tank that seeks to stimulate support for strengthening the labor market and benefiting workers) discusses how driver’s license suspension can have negative economic and social effects, especially if a license is suspended for non-driving-related reasons. Local communities, employers and employees experience serious negative consequences as a result of license suspensions, including unemployment, lower wages, and fewer employment opportunities and hiring choices. Some employers, particularly in the construction and healthcare fields, require a driver’s license as a precondition of employment, either because driving is part of the job or as a way to screen applicants.

In addition to these negative effects, other costs can be associated with license suspension, like the expensive license reinstatement process that includes court appearances and legal assistance. In some states, automobile insurance costs automatically increase after a suspension, even if the suspension is for non-driving reasons. Low-income workers are likely to be disproportionately affected by license suspensions arising from inability to pay fines and fees. Suspending low-income workers‘ licenses can lead to additional economic distress both for employers and the extended community when people are unable to reach or to apply for jobs inaccessible by public transit. This is yet another barrier to a low-income worker’s economic opportunity and stable income.

The Mobility Agenda report also discusses state-level policy changes making a crucial impact in reducing license suspension for non-driving-related reasons. For example, in Milwaukee, Wisconsin, community leaders succeeded in facilitating some statutory changes resulting in fewer license suspensions due to non-driving-related reasons. This change significantly decreased the number of drivers with suspended licenses in Milwaukee.

The driver’s license is a vital link to employment for many workers and should not be suspended for reasons unrelated to driving at the whim of policymakers who would like to convert the driver’s license into a “good citizen” card.

New - Access to Driving Listserv

Monday, November 24, 2008 | Margy's Blog & Updates

As we know, access to driving is key to a strong economy. Workers with a car are more likely to be employed, work more hours, and earn more than those without a car. (Workers with access to public transit are also disadvantaged compared to those with a car.)

For much more information on access to driving – please view our web pages on this topic at http://www.mobilityagenda.org/carfinancing.)

Please review the following invitation and contact information for a new listserv dedicated to car ownership and financing, from our friends at the National Consumer Law Center:

I am pleased to invite you to join an email discussion listserv dedicated to issues affecting car finance, sales, and ownership.  The discussion will focus on car ownership programs, policy changes to bring fairness to car buying and financing, and alternative financing products for car purchases by low-wage workers. 

This list is operated by the National Consumer Law Center with funding from the Annie E. Casey Foundation.   This listserv is for anyone who is concerned about car finance, sales, and ownership as well as anyone working on broader issues that affect access to transportation for workers and their families (e.g., insurance, driver’s licenses, maintenance, etc.).

The goals of this list are to:

1. Encourage collaboration and growth within the fields of low-income car finance, sales, and ownership
2. Highlight promising practices and innovative solutions
3. Provide a forum for sharing questions and addressing mutual challenges
4. Encourage improvement in public policy and advocacy for low-wage worker car finance, sales, and ownership
5. Promote resources, research, conferences, relevant materials, and job opportunities
6. Encourage networking and relationship building within the field


To join please go to:  http://lists.nclc.org/subscribe/ and check the Auto Ownership, Finance, and Policy list.

I hope you will join us in our effort to ensure that families have access to safe, reliable transportation at a reasonable price with fair financing terms.

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.