The Consequences of Insufficient Household Income

schools. Yet low-income families may not
be able to lease or buy a car or find housing
near public transit. This creates a wide range
of possible consequences for all members of the
household.
Transportation, especially the cost of a car,
consumes a significant portion of a lowincome
household’s budget, and that cost has
increased over the last decade. The most basic
transportation cost, as reported in the average
Household Survival Budget for a single adult,
is $341 per month, or $4,092 annually (21
percent of the budget). For a family of four, the
cost is $680 per month, or $8,160 annually (15
percent of the budget). However, costs vary greatly
among states and regions, with households in
more rural areas paying more than households
in largely suburban metro areas. For example,
among single-adult households, the cost of
transportation accounted for 14 percent of
all expenses in the Survival Budget for New
Jersey but almost 25 percent in Iowa.
TRANSPORTATION
Because most low-wage workers have to be on-site,
transportation is crucial to them, and it also determines how
easily a family
can reach doctors,
grocery stores, and
STRATEGIES
What do ALICE and poverty-level
households do when they cannot
afford transportation?
Even in metro areas, however, transportation costs are high. A recent study found that
moderate-income households in the nation’s 25 largest metro areas (those with an average
income of $44,566 per year) spent 27 percent of household income on transportation expenses,
an average of $11,912 annually. In addition, these expenses increased by 33 percent between
2000 and 2011, reflecting rising gas prices and growing populations living in suburbs (Hickey,
Lubell, Haas, & Morse, 2012; Hoopes, 2016).
1:
Forgo Other Expenses to Buy
and Maintain a Car
2: Minimize Car Expenses
3: Avoid Insurance, Registration,
and Paying Traffic Fines
4: Move Near Public Transportation
The gap between how much ALICE families need for transportation and what they can afford
to spend shows up clearly in Figure 8, which compares three different monthly transportation
budgets for a family of four to the monthly salary of a full-time security guard. Just over 1
million ALICE workers are security guards, earning an average hourly wage of $13.48, or
This section presents the best research available on the hard choices that struggling families are making every day when they do not have
enough money to afford transportation, and the consequences of those choices. These are not policy recommendations, but information and
analysis that can help stakeholders create the most effective solutions for their communities.
50 UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME