Access to Work and Affordable Housing for the Working Poor in Canada

1. Access to Work and Affordable Housing for the Working Poor in Canada Murtaza Haider, Rahel Merissa, & Timothy Spurr Montreal, Quebec

2. Outline • Who are Working Poor? • Defining LICO • A Profile of Working Poor • Socio-demographic characteristics • Housing needs • Accessibility to work • Interplay between housing and mode choice • A mode choice model of the Working Poor • Conclusions

3. Equity and Mobility Disadvantaged • Social justice and equity concerns are often not addressed explicitly in transport/urban planning • Discussion on sustainable urban form does not explicitly address the housing and mobility needs of transport disadvantaged groups • Low income earners face significant challenges in finding gainful employment in proximity of their residences • When employment opportunities are scarce near low-income neighbourhoods, public transit plays a critical role in improving accessibility to work for low-income earners • For equity concerns, affordable housing near employment nodes, or efficient and reliable public transit service from low-income neighbourhoods to employment nodes is important

4. Who are Working Poor? • David Shipler, author of The Working Poor: Invisible in America (January 2005) • “Most of the people I write about in this book do not have the luxury of rage. They are caught in exhausting struggles. Their wages do not lift them far enough from poverty to improve their lives, and their lives, in turn, hold them back. The term by which they are usually described, ‘working poor,’ should be an oxymoron. Nobody who works hard should be poor ...” • Working poor are either full-time or part-time workers, who spend a disproportionate amount of income on necessary items, such as food, clothing, shelter, transportation, and healthcare (uninsured dental care)

5. Low-Income Cut-off (LICO) • LICO is used to identify working poor • LICO measures the consumption of “essential” goods by a household and is expressed as a percentage of gross income. • In 1992, Statistics Canada determined that an average household would spend 34.7% of gross income on food, clothing and shelter. • LICO is therefore set at 20 percentage points above the average. A household spending 54.7% of its gross income on food, clothing, and shelter was considered low-income in 1992. • LICO considers a family of four persons earning $34,000 as a low-income household

6. LICO Estimates for 2001 • LICO has no relation to cost as it is primarily based on consumption • Therefore, by definition, LICO will increase with spending • Also, even when Montreal and Toronto differ significantly in housing costs and tax rates, Statistics Canada specifies an identical LICO measure for both Montreal and Toronto

7. Data • Disaggregate data are derived from 2001 Public Use Microdata File (Statistics Canada) • PUMF is a self-weighting 2.7% sample drawn from a sample of 20% Canadian households who filled the long form for the Census. • Data are available for most CMAs and territories • Data for Toronto CMA were extracted from the 2001 PUMF. • Data included 125,351 observations for Toronto CMA

8. Identifying the Working Poor • One in ten employed workers in Toronto is not earning enough and falls below LICO

9. Comparing Socio-demographics • Almost one in four single mothers fall below the cut-off • 30% of workers who live with non-relatives are below the cut-off • Almost 15% of workers who live alone are below the cut-off • 13% of children living with single mothers compared with only 6% of those living with single fathers are below the cut-off • Male and female spouses constitute the largest segment of those below LICO

10. Single Earner Households and LICO • Two in three households below the LICO cut-off are supported by one household maintainer • Implications • Life style matters:families are able to fight poverty • Support networks in immediate family structures help reduce the likelihood of falling into poverty • Unattached individuals are more likely to fall below LICO

11. Immigrants Dominate the Working Poor • Two in three working poor are immigrants • One out of 16 non-immigrants is the below cut-off • Two out of 15 immigrants are below the cut-off • Recent immigrants are more prone to poor living conditions • Two out of seven immigrants who migrated between 1996 – 2001 are below LICO • Two out of twelve immigrants who migrated between 1991 – 1995 are below LICO

12. Shelter Costs and LICO • One in 20 home owners are below LICO • One in five renters are below LICO • Share of owner-occupied housing dwellers paying in access of $1,100 in shelter costs is similar across LICO • Share of renters paying in access of $1,100 in shelter costs differs across LICO

13. Rental Housing and Commuting Distance • Rental housing represents a large segment of the housing stock for commuters who travel shorter distances to work • Home ownership rates are higher for workers who commute for longer distances

14. Journey to Work: Mode Splits • Comparatively, Working poor: • Rely less on auto drive • Rely more on public transit • Prefer to walk to work • No significant difference in auto-passenger mode splits

15. Commuting Distances • Working poor travel shorter distances to work • Working poor are more likely to work from home • Long commutes • One in 12 above LICO commutes for more than 30 km • One in 25 below LICO commutes for more than 30 km

16. Spatial Mismatch Hypothesis? • Most low-income earners find work within 10-km of their residence • Almost four out of five workers earning less than (10k, 25k, 40k) commutes for less than 15 km • Conversely, only 20% low-income earners commute for more than 15 km for work • Almost one in three workers earning less than (10k, 25k, 40k) commute for less than 5 km • High-income earners constitute the largest segment of long-distance commuters

17. Explanatory Variables Used in the Model

18. Mode Split Model • Auto Drive is the Base Case • Pseudo Rho-square: 0.1235 • Prob > Chi2 = 0.000 • LR Chi2 (60) 12528.85 • Log-likelihood = -44466.146 • Observations = 51,240

19. Model Results • Model slightly over predicts auto drive and under predicts transit and walk mode splits • All else being equal • Single mothers, visible minorities, recent immigrants and workers below LICO are more likely to use public transit than drive • Workers in households with children are more likely to travel by automobile to work than by transit • Workers residing in owned housing are more likely to drive to work than to take public transit • The odds of traveling by transit versus auto drive are by and large not affected by commuting distance

20. Sensitivity Analysis

21. Conclusions - 1 • One in ten workers in Toronto falls below the Low Income Cut-off • Two out of three working poor in Toronto are immigrants • Recent immigrants have a higher propensity to be below LICO than older immigrants • Single mothers and their children (over the age of 15) are more likely to be poor than households led by single fathers • A large majority of children in lone parent families reside with single mothers

22. Conclusions - 2 • Household (families) structure matters. Living alone or living with non-relatives is associated with a higher rate of poverty • Support structures available in families with multiple earners prevent households from falling below LICO • A large percentage of working poor live in rental housing • Comparatively, Working poor: • Rely less on auto drive • Rely more on public transit • Prefer to walk to work • Working poor travel shorter distances to work • Working poor are more likely to work from home • Spatial mismatch hypothesis may not apply to Toronto because most low income earners are able to find work within 10-km of their homes