New study finds MTA policies squeezing transit riders at both ends

For Immediate Release - February 24, 2011                                               Esperanza Martinez - 213-387-2800

New study finds MTA policies squeezing transit riders at both ends

Bus Riders Union-commissioned by UCLA economist reveals that, two years after federal stimulus, fare increases place burden on transit-dependent people already hit by high unemployment, declining wages

Two years after President Obama's stimulus package sent over $1 billion to Los Angeles for transportation, a new report shows from the Bus Riders Union shows steep fare increases imposed by MTA in the middle of an economic crisis increases the burden disproportionately on the region's low-income transit-dependent transit riders. The report, written by UCLA economist Paul Ong and Silvia Jimenez, reveals that the impact of the economic crisis of the last 3 years has been felt most of all by those at the lowest end of the economic ladder, a heavily transit-dependent population that has seen the sharpest drop in earnings alongside increases in rent and other necessary expenses.

The report confirms that the vast majority of workers who commute using public transit in Los Angeles are transit-dependent, living in households with fewer cars than adults or no cars at all. These workers are heavily concentrated in the lowest income quartile in LA County and the vast majority are people of color and renters. (The data used in the study does not account for other transit users, e.g. students, retirees, and unemployed -- who are currently not counted as part of the workforce). According to Metro's own data, bus riders - who are 80% of all riders in the Metro system - have even lower incomes on average than rail riders and more of them are people of color.

Key Findings:

Transit Riders are Predominantly Low-income People of Color, Renters, and Transit-Dependent [1]

* 89% of workers using transit are people of color; 92% of bus riders are people of color. [2]
* 78% of workers using transit are also renters.
* 82% of transit users are from households where one or more adult lacks access to a car.

Earnings are Down:

* The poorest quartile of households in L.A. County has been hardest hit
by the recession, experiencing a drop of almost 14% in earnings between
2006 and 2009. Adjusted for inflation, this is a loss of 20%. [3]
* L.A. County's unemployment rate has more than doubled since 2006, rising from 5.1% to 12.4%.[4]

The Costs of Living are Up:

* Since 2006, the purchasing power of a dollar in the LA-Riverside-Orange region has fallen by 6.1%.
* Rent among the poorest renters (at the 25th quartile) went up 15% from $701 to $796 between 2006 and 2009.

From the perspective of the BRU, what are the implications of this report for recent MTA policy?

We know transit-dependent workers have faced two transit fare increases in just three and a half years - July, 2007 and July, 2010. Taken together, the fare hikes have raised fares by 44% (cash fares) to 142% (day passes). Since 2007, Metro has also reduced bus service by 7% across the board, including eliminating 9 bus lines. The agency is currently proposing to cut another 5% of the total service, including the elimination of 11 bus lines and truncations or reductions of service on 16 others. For LA County transit-dependent people, who are facing declining wages and household income and desperately seeking work or trying to maintain it in an anemic job market, these policies amount to be squeezed at both ends.

Metro officials have claimed that a "structural deficit" in their budget necessitated these policies, insisting that the "failure of the bus system to live within its means,"[5] have made fare hikes and service cuts unavoidable. In fact, Metro's budget has grown substantially since 2009, with a regressive ½ cent increase in the sales tax generating $500-600 million in new revenue annually. 20% of these funds earmarked for buses service expansion have not materialized in any improvements. With its resources invested in expensive rail capital projects that show minimal returns in terms of new riders (7.5 million new rail riders from 2007 levels), the combination of fare increases and bus service cuts have pushed "borderline" riders back into their cars and others off of public transit altogether. The result is 57 million fewer bus boardings from 2007 levels and a combined drop in bus and rail of 11% since 2007. 

The report's authors are Paul Ong (pmong@ucla.edu),Professor of Professor of Urban Planning and Social Welfare at UCLA and UCLA researcher Sylvia Jimenez (jimenez.silvia@yahoo.com). Affiliations are listed for information purposes only.  

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[1] 2008
Microdata from US Census Bureau American Community Survey

[2] Spring
2009 Metro Bus Customer Satisfaction Survey Results

 

[3] 2007 and 2010 Current
Population Survey (CPS) Annual Social and Economic Supplement
(ASEC)

 

[4] California Employment Development Department,
US Bureau of
Labor Statistics, Current Population Survey

[5] Metro, "Title VI Assessment of Proposed and Adopted Fare Changes" dated May/June, 2007