Gas prices hit working class (crap, this was supposed to go in E/E)

[phantom power]

What thinking people already realize. Doubling fuel prices isn't a disaster if you make $100K/year. If you make $25K/year, it's a different story. And this is ignoring the effect of fuel prices on everything else we buy.

NEW YORK (CNNMoney.com) -- Lower-income Americans spend eight times more of their disposable income on gasoline than wealthier residents do.

The disparity is dramatic. In Wilcox, Ala., people spend 12.72 percent of their income to fuel one vehicle, according to a new study from the Oil Price Information Service (OPIS). In Hunterdon County, N.J., people spend 1.52 percent.

The study illustrates the impact rising oil prices are having on people's budgets. Many economists have downplayed the effect gasoline prices will have on consumer spending. But with prices now pushing above $3 and studies like this, some say the economy may take a hit.

(...)

The study shows that the amount people spend on gasoline as a percentage of their income has about doubled since 2002. In that period, gas prices have tripled and oil prices have soared nearly five-fold. Nationally, Americans spend 3.8 percent of their income fueling one vehicle, versus 1.9 percent in 2002.

http://money.cnn.com/2007/11/13/news/economy/gas_burden/index.htm

[AnneD]

1. I see more people...

riding the bus these days.

[kestrel91316]

7. Sadly, I'm seeing MORE jumbo SUVs than I did a year or two ago.....

I guess those discounts at the dealership were too much to resist.

[progressive_realist]

2. I did some back-of-the-envelope calculations the other day

And realized that the average person earning $100K/yr will not stop driving no matter how high gas prices go. Consider:

A person who drives 30 miles each way to and from work in a car that gets 15 mpg is currently spending a little over $240/mo on gasoline.

30 (miles) x 2 (trips/day) x 20 (workdays/mo) / 15 (mpg) = 80 (gallons/mo)

At $3/gallon, this person pays $240/mo to commute to and from work. This is a trivial amount to someone whose take-home pay is north of $6K/mo. Even if the price rises to $10/gallon, the $800/mo they would be paying is still not much more than the higher mortgage they would have to pay if they lived closer to the city. At this point, said well-to-do person just trades in the over-sized gas-hog for a smaller commuter car that gets 25-30 mpg (or buys a second vehicle and keeps the SUV for trips to the grocery store), and the driving habits stay the same.

Where the real pain comes in is with lower-income drivers and people who are required to drive extremely low gas mileage vehicles because of the type of work they do: farmers, construction workers, landscapers, etc.

[XemaSab]

3. Word problem:

If you make 7 bucks an hour, gas is four dollars a gallon, your car gets 20 miles per gallon, you live 40 miles from work, parking downtown costs 20 bucks all day, and you work 8 hours, is it even worth getting out of bed in the morning? :shrug:

[progressive_realist]

4. Well, gosh, it must be

Because only lazy people are poor. If you just work hard enough, you will be rewarded with a shiny Hummer and a second home in the Hamptons. :sarcasm:

$7 (per hr) x 8 (hrs/day) = $56/day

$56 - $11 (taxes) - $20 (parking) - $16 (gas) = $9/day take-home pay

I'm sure you can find a place to live and feed yourself on $180/month. And start saving for that Hummer.

[GliderGuider]

5. How about the global poor?

I just finished an analysis that hints at 5 billion people living on less than $2 a day in 40 years, with the world's fuel supply (oil and natural gas) down to 20% of its current level and damn few Teslas on the road in Bangladesh.

Five billion people with $2.00 a day and no oil or gas. It makes the situation in Wilcox seem positively luxurious. Screw it, the situation in Wilcox IS luxurious. Anyone who says different doesn't have a clue, and couldn't get a clue if they were standing in a field full of horny clues during clue mating season while smeared with clue musk and doing the clue mating dance.

Energy Decline and the Growth of Destitution

[phantom power]

6. I think "the situation in Wicox" is the opening act...

the final act being something like the situation described in your article. I doubt it would remain five billion people for very long, under those conditions. The mortality rate due to famine and disease would be tremendous.

[kestrel91316]

8. I suspect the mortality rate among the uber-wealthy would skyrocket, too.

At some point, you'd start to see just a little resentment from the former middle class........

[GliderGuider]

9. One can only hope...

:popcorn: (I had to use this because I couldn't find a smiley of Mme LaFarge knitting...)