At $4 per gallon, gasoline consumption will take 11% of daily income. It is expected that gasoline prices might rise above $6 per gallon by the end of summer. Such an increase would require 17% of daily income to meet gas needs. The percentage of income spent on gasoline climbs over 20% as we approach $8 per gallon. And a price of $12 per gallon would eat up fully a third of the average income. Half of the average income would disappear into the gas tank at $18 per gallon. And at $36 per gallon there would be nothing left of the average income.
Now, let us bear in mind that this average income is a median. That means half of the population earns less than that amount. The rise in gasoline prices will have a much more drastic effect on this half of the population. To see how it will affect them, let’s look at the minimum wage.
This portion of the population is already spending at least 17% of their wages on gasoline. By the end of summer, they could be spending over a quarter of their income on gasoline. And, at $12 per gallon, they will spend more than half of their income putting gas into their vehicle.
I can think of nothing better to demonstrate what a travesty is our current minimum wage. For those who argue that a rise in the minimum wage will hurt employers, I point out that as gasoline prices rise, the minimum wage will literally amount to a slave wage. It will not be long before no one can afford to take a job for minimum wage.
Both of the above charts also point out what an insult is the Bush tax rebate. At $4 per gallon, this rebate amounts to enough gasoline to meet average driving demands for 75 days. Or 50 days at $6 per gallon. For those who only receive $300 in their tax rebate – that is, for the minimum wage earners, Bush is offering to subsidize their gasoline for 38 days at $4 per gallon, or 25 days at $6 per gallon. It would be better to apply this money to the record budget deficits resulting from Bush’s illegal wars.
As gasoline prices increase people will have to take money from some other part of their family budget to pay their gas expenses. The following chart contains the Bureau of Labor Statistics average US cost of living statistics.(8) The dollar figures are from a suggested yearly income of $30,850.64.(9) This figure is much higher than the census bureau’s median income.