Employer-provided transportation solutions for economically disconnected workers
2020 started with an unemployment rate at a 50-year low. Times have changed, but even when the economy was at its strongest, not everyone had access to opportunity. In the Chicago region, 2.8 million people live in economically disconnected areas, which are mostly low-income communities of color. These areas are isolated from major employment centers, and residents face long and unreliable commutes. At the same time, many employers are located in places not accessible to transit. Four of every five jobs in Chicagoland are located outside the city core, where access without a personal vehicle is difficult or impossible. In Chicago and the region, 27 and 13 percent of households don’t have access to a personal vehicle. For many, this situation leads to high job turnover and economic instability, which make it difficult to climb the economic ladder. This is also hurting employers. Transportation-related turnover and absenteeism has a major impact on companies’ bottom lines.
Some employers with higher-wage workers have begun providing transportation assistance as an added benefit to attract and retain top talent. This might come in the form of a dedicated shuttle bus connecting to a nearby train station, subsidized transit fares or ride hailing credits (see Transit Means Business for select case studies). However, businesses with low- and moderate-wage positions have not typically offered similar transportation-related benefits. Historically, lower-wage positions were easy to fill, and employers didn’t view rapid turnover to be a significant financial problem. Additionally, employers have not felt it was their role to invest in supportive transportation solutions as a way to improve job stability. That is now changing. More businesses are recognizing that closing the mobility gap for employees at all pay grades can reduce turnover and absenteeism costs, often to such a degree that the costs of the transportation program are partially or fully offset.
MPC, in collaboration with Boston Consulting Group, has created a suite of tools to help employers develop a customized transportation solution that will increase the size of their labor pool and stabilize their workforce. The toolkit has three sections:
- Establish a baseline situation - Assess employer and employee needs to design the most effective solution
- Evaluate and select a solution - Evaluate tradeoffs between solutions to prioritize and select the best solution and provider
- Stand up a program - Once a provider is selected, implement your transportation program and track its impact
The toolkit includes an overview slide deck, customizable templates for you to fill out with your company’s information, and a cost calculator tool to understand the fiscal impact a solution may have.
You can watch short instructional videos and download the toolkit here.
By investing in a transportation solution to serve low- and moderate-wage employees, particularly those from economically disconnected areas, businesses have an opportunity to create mutually beneficial impact.
Reduce costs: In some cases, the cost of a transportation solution will be less than the cost of replacing employees who leave due to transportation-related issues. A transportation solution would also increase worker productivity, engagement, and loyalty.
Increase brand value: Stakeholders value social impact when evaluating and investing in companies. An employer-sponsored transportation solution demonstrates corporate social responsibility to strengthening the economic conditions for all of our region’s residents. Such efforts can garner significant positive awareness for your company’s brand.
Effect transformative impact in the greater Chicago region: We all need to play a role in increasing economic stability of the region. A transportation solution can improve the job stability for people who need it most. This has cascading benefits for employees and society at large. Especially when hiring from marginalized and economically disconnected communities, job stability can help shrink the racial wealth gap and lower crime.