WASHINGTON, D. C. (Sunday, April 28, 2019) ––Nationwide, gasoline prices have surged since the start of the year from $2.26 a gallon to nearly $2.90 a gallon yesterday, Saturday, April 27. The impact of the 64 cent increase in pump prices since January 1 is being felt more in some parts of the country than in others. To ascertain this, the Oil Price Information Service (OPIS) and AAA took a deep dive into how long the average worker, who earns less than 50 cents a minute, needs to work just to buy one gallon of gasoline. 

The average American worker earns $27.70 per hour. Working with OPIS, AAA analyzed a range of data to identify how much more time Americans have to punch the timeclock to afford a tank of gas. It varies across the country, depending upon average wages in sundry states and localities. This provides a revealing snapshot of the impact of rising gasoline prices on wage-earners. Year-to-year changes in pump prices also affect expenditures for an individual household, according to the Bureau of Transportation Statistics (BTS). 

“Motorists residing in rural areas tend to earn less yet drive more miles per capita than drivers in urban areas. The impact can also be measured in our wages,” said John B. Townsend II, AAA Mid-Atlantic’s Manager of Public and Government Affairs. “During 2016, ‘gasoline and motor oil purchases accounted for $255 billion (21.3 percent) in transportation expenditures,’ as federal government data reveal. History dictates, and global events portend, pump prices will continue to escalate through the Memorial Day holiday weekend.”

The data-points on the impact of rising gas prices on American workers can be found here. The average hourly earnings in the United States is $27.70 per hour, around 46.1 cents a minute, as of March 31. That’s up from $27.66 an hour in February. Now, how many minutes of work does it take to buy a gallon of gasoline? For the methodology, the median income for each county was broken down to an income by minute assuming a 40-hour workweek. The average gasoline price Friday was compared to the income per minute. 

Findings: 

• Counties in the Southeast have been hit the hardest with McCreary County, Kentucky topping the list. There the average worker needs to work a little more than 4 minutes more, compared to January, to buy a gallon of gasoline. 

• Holmes County, Mississippi was second with 16.02 more minutes of labor required followed by Greene County, Alabama; Wolfe County, Kentucky; East Carrol Parish, Louisiana; Stewart County, Georgia; and Owsley County, Georgia were all places where at least 15 minutes of work is needed to get to the pump.  

• In contrast, the average worker in Loudoun County, Virginia only needs to put in 2.63 minutes on the job to buy a gallon of gas. That is 18.7% more than the start of the year, but far less burdensome than many areas of the Southeast.  

• Fairfax City, Virginia was next with 2.90 minutes followed by Douglas County, Colorado; Fairfax County, Virginia; Falls Church, Virginia; Howard County, Maryland; Los Alamos, New Mexico; and Arlington, Virginia.  

In contrast, wages are higher across the Washington metro area, compared to wages in McCreary County, Kentucky, where the median household income in 2017 was $19,264.  In fact, households in the Washington metro area are “in the top income quintile.” For example, based upon a median annual household income of $77,649, the District of Columbia ranks 2,828 in the nation in terms of household incomes and the minutes needed to work to buy one gallon of gasoline now. With a median household income of $103,178 annually, Montgomery County ranks 3,064. Falls Church City boasts a household income of $129,599 on average annually, and ranks 3,077 on the list compiled by the Oil Price Information Service (OPIS). “The ‘Average Hourly Earnings’ is the average dollars that a private employee makes per hour in the US.”

A June 2018 survey by AAA found Americans were spending seven percent of their income on gasoline, up 1.5 percent from 2017. That meant a person making $45,000 annually was shelling out over $3,000 annually on gasoline purchases during the year. “Household spending on transportation is a large expense for American households,” explains the Bureau of Transportation Statistics (BTS).  “It influences many of their personal decisions, including where they live and work.” Calculate your salary per minute here.

Unlike a raft of other consumer products, gasoline emerges as “a highly salient cost to consumers because they see prices posted at every gas station,” explains the BTS. The price of gasoline is the “largest operating cost” in terms of vehicle ownership and automobile operating costs, according to AAA’s Your Driving Costs study and BTS data. Yesterday’s national price point for a gallon of self-serve regular gasoline is up five cents in the last week, up 22 cents in the last month, and is nine cents more than last year’s price.

The ancient law of supply and demand, as always, is a major pump price factor, as well as the wild cards of geopolitics. Unexpected and planned maintenance at refineries making the transition from winter blends of gasoline to summer blends, coupled with tightening gasoline stocks, and international currents are all contributing to the uptick in pump prices. For example, oil prices have increased in recent weeks, as political unrest in Libya, U.S. sanctions on Iran and Venezuela and OPEC’s reduced production contribute to tightening global crude oil supplies. Then there is the matter of the impact of the Trump administration’s “crackdown on Iranian oil exports,” as some are calling it.  On Monday, April 22, U.S. Secretary of State Michael R. Pompeo announced the United States will not issue “any additional Significant Reduction Exceptions to existing importers of Iranian oil.” The following day, Tuesday, crude oil prices hit “their highest in about six months.”

To take a closer look at the OPIS/AAA databank, simply click here. AAA provides wage-earners motorists some simple tips for improving fuel economy and stretching a tank of gas farther between fill-ups:

• Observe the speed limit. Not only is it safer, it can help you save money.  

• Lose the weight. The heavier your car, the more fuel it uses. 

• Accelerate gradually. Avoid jackrabbit starts. 

• Drive during cooler parts of the day. Cooler, denser air can boost power and mileage. 

• Maintain recommended tire pressure. Low pressure reduces fuel economy and can damage tires. 

AAA has a variety of resources to help motorists and wage-earners save on fuel:

• Shell Fuel Rewards Program for AAA Members: (https://www.AAA.com/Shell) gives AAA members nationwide a discount on gasoline at Shell stations when they join the Fuel Rewards® program. 

• Fuel Price Finder (https://www.AAA.com/fuelfinder) locates the lowest fuel price in your area.  

• AAA Gas Cost Calculator (https://gasprices.aaa.com/aaa-gas-cost-calculator/) helps budget travel expenses.  

• TripTik Mobile (https://www.aaa.com/mobile) plots fuel prices along your travel route.  

• AAA's Member Rewards Visa® Credit Card (https://www.AAA.com/financial/AAAvisa.htm) accumulates double points on fuel purchases.  

Curious? Calculate your salary per day, hour, minute and second right here. It might disappoint you. Historically, “in the United States, wages are benchmarked using average hourly earnings,” explains Trading Economics. Such earnings are tracked by the Bureau of Labor Statistics (BLS). Last year, “the typical American worker brought home $937.02 every week,” according to the Money&Career CheatSheet.  

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AAA provides automotive, travel and insurance services to 58 million members nationwide and nearly 79,000 members in the District of Columbia.  AAA advocates for the safety and mobility of its members and has been committed to outstanding road service for more than 100 years.  The not-for-profit, fully tax-paying member organization works on behalf of motorists, who can now map a route, find local gas prices, discover discounts, book a hotel and track their roadside assistance service with the AAA Mobile app for iPhone, iPad and Android. For more information, visit  https://aaa.com