THE REAL COST OF COMMUTING
Long commutes aren’t just a waste of time. There’s also a massive financial cost.
my friends who commute between Stellenbosch and Cape Town every morning tell me that they have to be on the road at 05:15 or they’ll be stuck in traffic. That is much worse than a decade ago, when they could easily be at the office at 07:00 after leaving home at 06:00.
The stats back up their story. A new study by Andrew Kerr of UCT’s research unit Data First, titled Tax(i)ing the poor? Commuting costs in South Africa, shows that in 2003, white South Africans spent 54 minutes/day commuting by car, longer than the average for the US and all 23 EU countries at the time. By 2013, this number had increased to 67 minutes.
But those with cars are the lucky ones. Black South Africans, who predominantly use public transport, spent an exorbitant 87 minutes commuting per day in 2003. Ten years later, that number had increased to 101 minutes/day.
These shocking statistics are not only expensive in terms of family time lost, but also as a proportion of the budget. Kerr shows just how expensive this is. Take a full-time worker with a monthly income of R3 000 (close to the median income in SA). R3 000 a month amounts to approximately R17/hour. Deduct the monthly transport costs and the two hours spent in traffic, and the R17/hour falls to R12.50, a 26% decline in wages compared to someone who worked from home. Kerr calculated what amounts to transport ‘taxes’ for different modes of transport: 26% for minibuses, 31% for bus users and 39% for those using multiple modes.
And not only is transport required to access jobs, but good schools are often far from townships.
My point: South Africa may have high wage levels compared to other developing countries, but the high commuting costs reduce the purchasing power of these wages significantly. Both firms and trade unions should take note. Even if the cost of transport as a percentage of wage income can be limited to 10% (R15.30 hourly wage instead of R12.50), the impact on workers’ earnings would be massive: it would entail an increase of 11% in spending power. That’s how you negotiate a higher salary without anyone paying for it.
How do we reduce these costs?
Can subsidies help alleviate some of this burden, especially for the poorest of the poor? Not really, Kerr finds. Current subsidies are targeted at buses and trains, and it seems that these benefits do not sufficiently trickle down to consumers. Only 7.3% of the poorest 20% income earners actually use these modes of transport, in comparison to 19.6% who use minibuses. (In the total population, 22% of commuters use taxis compared to only 6.1% who use buses and only 2.8% who use trains.) Subsidising public transport can only play a limited role in reducing the cost burden of commuting.
What are the alternatives?
One option is to tax the use of personal vehicles more heavily. In theory this is what the e-toll system had hoped to achieve, but due to poor management it failed to win public support. Another is to expand the road network, but economists know that making personal transport cheaper will only encourage more of it, which will result in even more traffic and congestion. A larger road network is a very expensive way of not fixing the problem.
The only alternative is to bring people closer to where they want to work and play. For those at the top, the opposite is also true: bringing work and play closer to where people live. But that is not really an option for the poor. In fact, as research by Edward Kerby shows in a 2014 study titled African manufacturing wages, the apartheid government tried exactly that with the Regional Industrial Decentralisation Programme, and failed.
To reduce the commute would require building denser neighbourhoods of affordable housing closer to cities. It would require building more and, especially, better public-transport-integrated networks. It would require creating a one-ticketing system with low or even zero fees for the poorest, notably children and the old-aged. Government action is key, but firms and trade unions can help by demanding change. Commuting fees must fall for wages to rise.
South Africa may have high wage levels compared to other developing countries, but the high commuting costs reduce the purchasing power of these wages significantly.
Andrew Kerr Senior research officer at Data