That article misses the point on several levels, though.
First of all, it is only discussing the cost of gas at the pump -- which again, is only a small part of the picture. It does not take into account how this cost affects the transportation industries responsible for the distribution of other goods. You can't tell me that an increase in gas prices of nearly 30% is not going to have an affect upon these industries, or that these extra costs are not going to be directly passed on to consumers through price increases.
Secondly, when it talks about "minutes of work" it is, I would presume, basing this number upon average wages (though it doesn't specify, and in fact does a poor job of backing up its argument overall). When it gives the figure, it fails to adjust for changes in relative incomes. In 1950, the year that it cites for the higher "12 minutes of work per gallon" number, minimum wage was at 56% of the average wage. In 2005 (the most recent year for which I could find data in a quick search), people earning minimum wage earned only 32% of the average wage. Therefore, a significantly larger number of people don't fall into that average "minutes of work" figure, and have to work a significantly longer time than that to afford gas. Someone earning the federal minimum wage of $5.15/hour has to work for 37 minutes to afford one gallon of gas (and that number is before taxes, so it's actually significantly more than that).
I could go into more, but honestly I don't have time at the moment. But basically, that article is poorly researched bullshit.
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timeasmymeasure
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Date: 2007-05-22 07:01 pm (UTC)First of all, it is only discussing the cost of gas at the pump -- which again, is only a small part of the picture. It does not take into account how this cost affects the transportation industries responsible for the distribution of other goods. You can't tell me that an increase in gas prices of nearly 30% is not going to have an affect upon these industries, or that these extra costs are not going to be directly passed on to consumers through price increases.
Secondly, when it talks about "minutes of work" it is, I would presume, basing this number upon average wages (though it doesn't specify, and in fact does a poor job of backing up its argument overall). When it gives the figure, it fails to adjust for changes in relative incomes. In 1950, the year that it cites for the higher "12 minutes of work per gallon" number, minimum wage was at 56% of the average wage. In 2005 (the most recent year for which I could find data in a quick search), people earning minimum wage earned only 32% of the average wage. Therefore, a significantly larger number of people don't fall into that average "minutes of work" figure, and have to work a significantly longer time than that to afford gas. Someone earning the federal minimum wage of $5.15/hour has to work for 37 minutes to afford one gallon of gas (and that number is before taxes, so it's actually significantly more than that).
I could go into more, but honestly I don't have time at the moment. But basically, that article is poorly researched bullshit.