Over at Wonkblog, Max Ehrenfreund breaks down how the rich and poor really spend their money, using a great new dataset from the Bureau of Labor Statistics that splits Americans into income deciles (ten equal-sized groupings). But the stats also show how the middle-class spend their money, and when it comes to annual transportation expenditures, the results are pretty alarming.
In the basic-necessity categories of food and housing, the numbers align in predictable ways. The rich spend more in these areas, but this spending also accounts for a lower share of overall annual household expenditures—with the reverse true for low-income Americans. So, in the chart below, the columns representing food and housing expenses climb, just as the lines representing those costs as shares of total household expenditures slope down:
But as Ehrenfreund notes, something screwy is going on with transportation. In this case, the numbers show that middle-class Americans spend a much higher share of their total household annual expenditures on getting around, compared with the poorest and richest groups. Instead of gentle downward slopes, the transportation shares are closer to a bell curve (with the sixth decile added in for emphasis):
The same surprising distribution holds true when we drill down into a subset of transportation costs. The middle-class pays an outsized share on gas, vehicle maintenance, car insurance, and "other" related expenses—with the fifth decile above the medians (4.9, 1.6, 2, and 5.1 percent, respectively) in every case:
What's more, when you put transportation costs together with housing costs, you see that the middle classes more closely resemble the poorest decile than the richest one in terms of expenditure share:
The data don't say why transportation is taking a disproportionate toll on middle-class wallets, but it's not hard to target a confluence of factors: sprawling development, city housing affordability, poor transit investment, and the result of them all, car-reliance.
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. 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.
But a middle-class household living in the suburbs is more likely to have no better choice than driving to work or to shops. The disproportionate gas share here is especially telling: while fuel costs accounted for 4.9 percent of median annual spending for all households, they accounted for 6.1 percent for fifth-decile households—the highest share for any income cluster. That's painful on a daily basis, and it's a bad sign for progressive policy, too: as things stand, if the price of gas were raised to match the true social cost of driving, many middle-class families wouldn't survive.