October 12, 2009
Driving out of Poverty and Unemployment
What’s the easiest way to get from welfare to work? Drive there.
Decades of convincing research proves that access to a car is a significant factor in moving off social assistance and into the work-a-day world. It’s time governments in Canada started paying attention to this crucial fact.
The role of a car in getting off social assistance is rather obvious once you think about it. The more jobs you can get to, the better your chances of finding one that suits you. And having a car allows you to access far more jobs than is possible with public transit.
While public transit may be less expensive than owning a car, outside Canada’s three major metropolises of Montreal, Toronto and Vancouver, reliance on the bus poses a real barrier to an effective job search.
Many entry-level jobs – such as office cleaning or building security – require long commutes and/or off-peak hours of work when bus routes are shut down or on reduced frequency. This is not a trivial issue. Surveys show that lack of convenient transportation is a major obstacle to employment among low-income families in Canada.
Evidence from the U.S. is even more convincing. Academic research in California has shown that residents in low-income areas of Los Angeles can reach 59 times more job opportunities with a car than they can relying on buses alone.
The employment rate for car owners is approximately 80 percent, while the rate for those without a car is 53 percent. A study of high school drop-outs found that having a car was just as important to future job prospects as having a diploma. Car owners work longer hours and make higher wages.
There is solid evidence demonstrating a causal link between having a car and finding a job as well. It is not simply the case that people with jobs can afford to buy a car. Rather, having a car increases your chances of finding a job.
Cars also improve your ability to keep a job, by reducing absenteeism. And for families with time-constraints – single mothers in particular – a car allows you to drop the kids off at school or daycare, do some shopping and still get to work on time. That sort of multi-tasking is nearly impossible with the bus.
Given this important link between cars and jobs, the obvious question is what to do about it.
In the U.S., the role of cars in improving employment prospects has prompted a variety of policies and reactions. For instance, over 170 U.S. charities have programs to match social assistance families with cheap but reliable cars. One of the most well-known and successful is the Good News Garage, based in Vermont and recently featured on The Oprah Winfrey Show. It provides single mothers on welfare with donated cars.
In Canada, unfortunately, the issue of cars and employment receives zero public attention.
In fact, many provincial policies actually make matters worse. British Columbia, Alberta, Ontario and Quebec all apply vehicle asset tests for social assistance eligibility. If you are unemployed in Vancouver and own a car worth more than $5,000, you could be forced to sell it in order to qualify for social assistance.
This sort of policy makes no sense. Losing access to a car is the worst thing that could happen to anyone on social assistance. Being forced to rely on public transit poses a significant obstacle to finding a job and getting off welfare.
And this is a problem that will get worse in the coming year. The large cohort of Canadians who became unemployed in the recession are now receiving federal Employment Insurance payments. Soon, however, they will have to move on to provincial social assistance programs. And depending on where they live, they may face the prospect of selling their car in order to receive benefits.
In the U.S., most states have removed their vehicle asset tests for social assistance eligibility. Those states that still impose them are currently facing an effective national lobbying effort from the New America Foundation.
It’s time for Canada to recognize the important benefits of car access, as is the case in the U.S. We need to improve research in this area. We need to encourage Canadian charities to get involved in providing low-cost cars to unemployed Canadians. And we need to adjust social assistance rules to ensure current policies are not impeding car access.
The road out of poverty can be a bumpy one for unemployed Canadians. We should be doing everything we can to make the ride smoother.
Peter Shawn Taylor,
is currently Editor at Large of Maclean’s magazine. He earned a Master’s degree in Economics from the University of Alberta in 1989; and was senior analyst for the Alberta Liberal Caucus in the early 1990s under Liberal Leader Laurence Decore. Since then he has worked extensively in journalism. He has been a staff member of Alberta Report, Canadian Business and the National Post, where he was a founding member of the editorial board in 1998, as well as Maclean’s. In addition, he has written widely for publications including Reader’s Digest, Saturday Night, Equinox, MoneySense, Canadian Geographic, Prospect, Globe and Mail, Vancouver Sun and National Post Business. He has given presentations and is a frequent media commentator on public policy issues including daycare, family taxation and poverty.