Spending More on Bus Transit Helps Lower Employee Turnover—and Makes Neighborhoods More Resilient

9.18.2013 | Of the myriad reasons why some neighborhoods, cities, suburbs, or regions are more resilient than others, this space has considered everything from whether ZIP codes are more important than genetics to questions of renting vs. homeownership, from the link between income mobility and where you live to questions of national housing policy reform.

The Federal Reserve Board took time in April to examine the rebuilding of low-income communities and factors that make them resilient. Papers and video session highlights from the Resilience and Rebuilding for Low-Income Communities conference are now available online.

During eight sessions, research was presented on why young families lost wealth during the Great Recession; the impact of homeownership, financial hardship, and health on low-income Americans; the implications for low-income residents when big-box retailers come into downtowns and urban neighborhoods; resilience in post-Hurricane Katrina reconstruction; and use of data, among other topics.

Of particular note, however, is BRR member Rolf Pendall’s “Metropolitan Resilience, Precarious Housing, and the Durable State of Concentrated Poverty,” co-authored by Brett Theodos, Kait Franks, and Rebecca Grace, all of the Urban Institute.

The authors found that in metro areas, concentrated poverty is exacerbated by unaffordable, precarious housing: “Vulnerable people concentrate disproportionately in specific precarious housing types. As those housing types concentrate in specific neighborhoods, this yields concentrated poverty.”

But the correlation is different in different metro areas. In some, a high rate of rental housing is what correlates most strongly with concentrated poverty, while in others, it is unaffordable housing.

Every metro has “habitats of poverty,” but not all are equally concentrated. Different precarious housing types predict the formation of habitats of poverty, varying by metro.

Also interesting is the role of bus transit in unemployment, examined by Dagney Faulk and Michael Hicks, of Ball State University, in “The Impact of Bus Transit on Employee Turnover: Evidence from Quasi-Experimental Samples.”

They find that the bigger the fixed-route bus system (measured as real per capita operating expenditures) the lower the employee turnover rates—a dollar increase in per capita operating expenditures for a bus system decreases employee turnover by 0.03 to 0.05 percentage points. Moreover, an increase in bus systems’ per capita operating expenditures is associated with a decrease in employee turnover.

This ultimately saves employers money, which could probably be the best way to convince them to support transit:

The availability of fixed-route public transportation reduced employee turnover in manufacturing by 1,100 to 1,200 workers per year over the study period in counties with small cities within the six-state region included in this sample. The associated reduction in manufacturing turnover costs is $5.3 million to $6.1 million per year. The availability of transit reduces retail turnover by 900 to 1000 workers. The reduction in turnover costs is $1.7 to $1.9 million.

These results suggest that access to fixed-route bus transit should be a component of the economic development strategy for low-income communities not only for the access to jobs that transit provides low-income workers but also for the benefits provided to businesses that hire these workers.

One question occurs, however: In current transit parlance the phrase “fixed-route” as applied to buses is very likely to be interpreted as referring to Bus Rapid Transit, which is a very different animal than regular bus service.

Then again, as a railfan, I’m particularly—okay, spectacularly—biased toward streetcars rather than buses, so I’m rather curious to know if the same results are to be found in cities that kept, or reinstated their streetcar systems.

Photo / Stephen Rees

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