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

Murtaza Haider, Rahel Merissa, & Timothy Spurr

Montreal, Quebec

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

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

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)

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

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

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

Identifying the Working Poor

One in ten employed workers in Toronto is not earning enough and falls below LICO

TotalCount Precentage Count Precentage

Proportion of the total population 104,275 83.2% 21,076 16.8% 125,351Proportion of the total labor force 61,609 89.1% 7,546 10.9% 69,155Proportion of the unemployed labor force 2,855 71.0% 1,169 29.1% 4,024Proportion of the employed labor force 58,754 90.2% 6,377 9.7% 65,131

Above LICO Below LICO

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

Count % Count %Proportion of the employed labor force 58,754 6,377 90.21 9.79 Male Spouse 17,936 30.53% 1,693 26.55% 91.38 8.62 Male Common-Law Partner 2,127 3.62% 155 2.43% 93.21 6.79 Male Lone Parent 598 1.02% 65 1.02% 90.2 9.8 Female Spouse 14,911 25.38% 986 15.46% 93.8 6.2 Female Common-Law Partner 1,912 3.25% 123 1.93% 93.96 6.04 Female Lone Parent 2,223 3.78% 674 10.57% 76.73 23.27 Never married child in a married couple 8,173 13.91% 442 6.93% 94.87 5.13 Never married child in a common-law couple 235 0.40% 15 0.24% 94 6 Never married child with a male lone parent 495 0.80% 32 0.50% 93.93 6.07 Never married child with a female lone parent 2,130 3.63% 330 5.17% 86.59 13.41 Living with Relatives 1,363 2.32% 128 2.01% 91.42 8.58 Living with Non-Relatives 2,117 3.60% 925 14.51% 69.59 30.41 Living alone 4,534 7.72% 809 12.69% 84.86 15.14

Above LICO Below LICO Distribution withinthe Group (%)

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

Household Maintainers Count % Count % One Maintainer 26,710 45.46% 4,110 64.45% Two Maintainers 28,688 48.83% 1,905 29.87% Three of More Maintainers 3,356 5.71% 362 5.68%

Above LICO Below LICO

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

Count % Count %Status in Canada 58,754 6,377 Non-Permanents Residents 387 0.66% 196 3.07% 66.38 33.62 Permanent Residents: Non-Immigrants 31,329 53.32% 2048 32.12% 93.86 6.14 Permanent Residents: Immigrants 27038 46.02% 4133 64.81% 86.74 13.26 Before 1961 1,950 7.21% 84 2.03% 95.87 4.13 1961-1970 3,372 13.95% 224 5.42% 93.77 6.23 1971-1980 6,001 22.19% 454 10.98% 92.97 7.03 1981-1990 6,716 24.84% 857 20.74% 88.68 11.32 1991-1995 4878 18.04% 987 23.88% 83.17 16.83 1996-2001 3721 13.71% 1527 36.95% 70.9 29.1

the Group (%)Above LICO Below LICO Distribution within

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

Count % Count % Owns 43,633 2,503 94.91 5.09 Pays less than $100 4 0.01% 2 0.08% 66.66 33.33 Pays between $100 & $299 748 1.72% 81 3.25% 90.23 9.77 Pays between $300 & $499 5,690 13.07% 310 12.44% 94.83 5.16 Pays between $500 & $699 5,388 12.37% 275 11.04% 95.14 4.86 Pays between $700 & $899 2,597 5.96% 160 6.42% 94.2 5.8 Pays between $900 & $1099 2,736 6.28% 203 8.15% 93.09 6.91 Pays $1,100 and Over 26,379 60.58% 1461 58.63% 94.75 5.25 Rents 15,121 3,874 79.61 20.39 Pays less than $100 238 1.57% 69 1.78% 77.52 22.48 Pays between $100 & $299 185 1.22% 165 4.26% 52.86 47.14 Pays between $300 & $499 357 2.36% 316 8.16% 53.05 46.95 Pays between $500 & $699 1,574 10.41% 557 14.38% 73.86 26.14 Pays between $700 & $899 4,251 28.13% 1097 28.32% 79.49 20.51 Pays between $900 & $1099 3,701 24.49% 889 22.95% 80.63 19.37 Pays $1,100 and Over 4,807 31.81% 780 20.14% 86.04 13.96

Distribution withinthe Group (%)

Above LICO Below LICO

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

0102030405060708090

dis tanceless than 5

dis tance 5to 9.9 km

dis tance 10to 14.9 km

dis tance 15to 19.9 km

dis tance 20to 24.9 km

dis tance 25to 29.9 km

dis tancegreater

than 30 km

PUMS 2001, Toronto

Owened Rented

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

Count % Count %Commuting Mode 58,754 6,377 Without a Commuting Mode 3,733 550 87.16 12.84 With a Commuting Mode 55,021 5,827 90.42 9.58 Car-Driver 37,060 67.36% 2,715 46.59% 93.17 6.83 Car-Passenger 3,424 6.22% 384 6.59% 89.92 10.08 Transit 11,475 20.86% 2,108 36.18% 84.48 15.52 Walk 2,277 4.14% 464 7.96% 83.07 16.93 Other 785 1.43% 156 2.68% 83.42 16.58

Above LICO Below LICO Distribution withinthe Group (%)

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

Count % Count %Commuting Distance 58,754 6,377 Without a Commuting Distance 4,932 798 With a Commuting Distance 53,822 5,579 Works at Home 3,457 6.42% 516 9.25% 87.01 12.99 Distance between 0 and 5 km 14,022 26.05% 1,857 33.29% 88.31 11.69 Distance between 5 and 9.9 km 12,090 22.46% 1,314 23.55% 90.2 9.8 Distance between 10 and 14.9 km 8,132 15.11% 845 15.15% 90.59 9.41 Distance between 15 and 19.9 km 5,554 10.32% 471 8.44% 92.18 7.82 Distance between 20 and 24.9 km 3,778 7.02% 231 4.14% 94.24 5.76 Distance between 25 and 29.9 km 2,399 4.46% 120 2.15% 95.24 4.76 Distance greater than or equal to 30 km 4,390 8.16% 225 4.03% 95.12 4.88

the Group (%)Above LICO Below LICO Distribution within

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

Income 0 to 5 km 5 to 15 km 15 + km TotalInc < 10k 35.74 43.55 20.71 10010k < Inc < 25k 37.98 42 20.02 10025k < Inc <40k 34.89 43.37 21.74 10040k < Inc < 65k 31.5 42.21 26.29 100Inc > 65k 26.32 39.04 34.65 100Total 28.95 40.33 30.72 100

Inc < 10k 2.99 2.61 1.63 2.4210k < Inc < 25k 6.64 5.27 3.3 5.0625k < Inc <40k 10.75 9.59 6.31 8.9240k < Inc < 65k 22.09 21.25 17.37 20.31

Commuting Distance

Explanatory Variables Used in the ModelVariables MeanBelow LICO 7.66%Female 49.70%Single Mothers 5.57%Workers with no children 44.40%Children Under 5 years 10.69%Children over 5 years 44.90%Resides in rental housing 23.74%Resides in owned freehold housing 68.35%Resides in owned condominium 7.91%Commute distance < 5 km 27.65%Commute distance: 5 to 15 km 40.03%Commute distance > 15 km 32.32%Visible Minority 36.00%Non-immigrants 50.46%Immigrated during 1991-01 17.78%Immigrated during 1971-90 22.69%Immigrated before 1970 9.07%Professional or Manager 31.19%Fulltime employee 80.93%

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

VariableRRR z RRR z RRR z RRR z

Below LICO 1.053 0.73 1.311 6.45 1.573 5.81 1.397 2.4Female 2.827 26.76 2.107 30.23 1.620 9.62 0.897 -1.31Single Mothers 0.533 -5.89 1.465 7.84 1.223 1.95 1.440 2.03Children Under 5 years 0.506 -9.92 0.533 -15.42 0.460 -8.05 0.599 -3.42Children over 5 years 0.473 -17.6 0.494 -25.91 0.501 -12.03 0.626 -5.03Resides in owned freehold housing 0.849 -3.51 0.381 -34.84 0.367 -18.29 0.540 -6.66Resides in owned condominium 0.751 -3.71 0.534 -14.17 0.590 -5.81 0.607 -3.04Commute distance: 5 to 15 km 0.677 -9.34 1.079 2.56 0.049 -33.77 0.303 -13.42Commute distance > 15 km 0.543 -12.62 1.074 2.24 0.078 -29.92 0.159 -14.88Visible Minority 1.448 7.72 1.769 18.42 0.853 -2.41 0.767 -2.33Immigrated during 1991-01 1.414 5.81 1.551 11.45 1.321 3.53 1.044 0.31Immigrated during 1971-90 0.922 -1.43 1.109 2.87 0.893 -1.48 0.724 -2.48Immigrated before 1970 0.756 -3.61 0.914 -1.88 0.928 -0.78 0.712 -2.15Professional or Manager 0.476 -15.05 0.973 -1.03 1.103 1.73 1.157 1.65Fulltime employee 0.475 -18.01 0.649 -14.15 0.399 -17.32 0.486 -7.91

Auto Passenger Transit Walk Other

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

Car_Pass Transit Walk Other Car_DrivForecasted Probabilities 6.15% 20.74% 1.67% 1.08% 70.35%

Sensitivity AnalysisVariables Car_Pass Transit Walk Other Car_Driv

Below LICO -0.15% 4.36% 0.74% 0.31% -5.26%Female 5.06% 10.68% 0.42% -0.36% -15.80%Single Mothers -3.22% 7.43% 0.23% 0.36% -4.81%Children Under 5 years -2.63% -8.14% -0.82% -0.33% 11.92%Children over 5 years -3.26% -10.09% -0.79% -0.28% 14.41%Resides in owned freehold housing 0.62% -16.46% -1.41% -0.40% 17.65%Resides in owned condominium -0.87% -8.36% -0.56% -0.34% 10.12%Commute distance: 5 to 15 km -1.87% 3.05% -5.06% -1.12% 5.00%Commute distance > 15 km -3.01% 2.98% -3.36% -1.56% 4.96%Visible Minority 1.43% 9.38% -0.48% -0.42% -9.90%Immigrated during 1991-01 1.43% 7.10% 0.26% -0.09% -8.70%Immigrated during 1971-90 -0.56% 1.94% -0.20% -0.33% -0.85%Immigrated before 1970 -1.35% -1.04% -0.06% -0.29% 2.74%Professional or Manager -3.83% 0.33% 0.24% 0.21% 3.05%Fulltime employee -4.15% -5.61% -1.58% -0.69% 12.03%

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

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