By allowing ads to appear on this site, you support the local businesses who, in turn, support great journalism.
How car reliance is squeezing the middle class
f285bd5db9be46ef026e37059374404b520fd50fdf7c60f495b8e7f30d0d5bf4
Where your money goes whether it's on housing or food depends a lot on if you're rich or poor. But odds are, if you're middle class, a disproportionate amount of your income is getting sucked up by your car. - photo by Lane Anderson
Where your money goes whether it's on housing or food depends a lot on if you're rich or poor. But odds are, if you're middle class, a disproportionate amount of your income is getting sucked up by your car.

The Bureau of Labor Statistics released new data last week showing how different income brackets spend their money, and not surprisingly, middle-class and lower-middle-class households spend a higher percentage of their income on necessities like housing and food compared to their richer counterparts. But the biggest outlier for these families was the cost of getting around.

The middle class pays an oversized share on car payments, gas and other vehicle-related expenses up to 19 percent of annual income compared with about 15 percent in the highest groups and around 14 percent for the lowest income bracket, according to the study.

The data set doesn't explain why transportation is taking a bigger toll on middle-class budgets, but sprawl, city housing affordability, poor public transit options and car-reliance are likely the main culprits, according to CityLab.

"Wealthy households own cars, of course, but they can also afford to live closer to work, or in city centers with better transit options whether that's the subway in New York or the Google bus in San Francisco," wrote Eric Jaffe in a CityLab report.

"Low-income city households also tend to rely on buses and trains, and while in their case that might make a commute much longer (and in some cases limit job access), it does keep transportation costs down."

Meanwhile, a middle-class family in the suburbs is likely to live farther away from work and shopping, but aren't likely to have access to good public transportation. Gas, in particular, guzzles up middle-class family budgets: gas made up almost 6 percent of the annual share of total transportation spending for those in the middle, almost twice as much as those in the highest bracket, who clocked in at about 3.5 percent for gas.

When transportation costs were combined with housing costs, the data revealed that middle-class families spend a lot of their money on these two necessities at 55 of annual expenditures, or over half of their yearly income. This was close to what the lowest groups spend about 57 percent, while the highest-income groups spend less than 47 percent.
Sign up for our e-newsletters