The idea of helping low-income people by subsidizing their fares on public transportation sounds noble. It truly does. But as a means of confronting the national problem of meager paychecks, it’s rather misdirected.
All eyes are now on Seattle, which has started offering discount fares to riders whose household income does not exceed twice the federal poverty level. The growing gap in wealth between the affluent and the working poor is a national woe – especially in boom cities like Seattle, where rising real estate values are forcing lower-paid workers to commute from the suburbs.
“It’s people doing really well and people making espresso for people who are doing really well” is how King County Executive Dow Constantine, also head of Sound Transit, described the situation.
But one might then ask, Why aren’t the people making espresso doing better?
Public transportation is typically funded through the fares users pay and considerable government subsidies. So the Seattle area’s reduced-fare ORCA Lift program is being supported by the taxpayers and the better-off passengers.
On one level, that sounds reasonable. But on another, it amounts to an accommodation of inadequate pay. The public is easing the market pressure on the employers to boost pay.
Wal-Mart has never been shy about connecting its low-paid workers with Medicaid or food stamps – in effect asking the taxpayers to subsidize its labor force and its bottom line. Four of Sam Walton’s heirs currently sit in the top 10 on the Forbes list of wealthiest Americans, with a combined net worth of close to $160 billion.
There’s been much heralding of Wal-Mart’s recent decision to raise its entry-level wage to $10 an hour (because of a tightening labor market). That’s still less than the federal minimum wage in 1968, which would be $10.58 in today’s dollars.
Back in Seattle, Basro Jama, a Somali immigrant supporting two children, earns less than $25,000 a year after taxes working a full-time job, according to The New York Times. She commutes from her home in Tukwila to her assignment in downtown Seattle cleaning offices. Thanks to her new reduced-fare card, she saves $10 a week, or nearly 2.5 percent of her paycheck.
taking home only $25,000? The real estate barons charging sky-high rents to top-paid professionals can darn well hand their workers another $10 a week so they can travel to the job. They’re the ones who should be giving Jama a 2.5 percent raise.
Or perhaps they’d like to vacuum and clean the office tower toilets themselves.
San Francisco has long run a reduced-fare program for the poor, but few people have signed up for it. That’s largely because the means-testing adds a messy layer of bureaucracy to what should be a simple transaction of buying a ticket or fare card.
Obviously, the applicants must provide documentation of their low income. The ORCA Lift program requires different income verification documents – if you are in certain benefits programs, if you have no income, if you are employed – plus basic identification. And other people must be hired to oversee the process of issuing the cards.
A higher minimum wage makes so much more sense than means-testing for certain public services. Seattle has been a national leader in raising its minimum, currently $15 an hour. That way, the beneficiaries of the workers’ labor are paying for it.
There’s been an unfortunate mindset across the land that employers of low-skilled workers have a right to labor at a fixed low price. Let’s not validate it.