NAC: gas prices going up.....more...

[Alex Kowalski]

Last month I posted a little joke about road-trip "emergency supplies" for a late-60's Chrysler Imperial.  The site where I found the suggestions also had a few other interesting bits of data.  They're not from any official source, but I see no reason to believe they're wildly off.  It was interesting to compare gas prices vs. average wages for "production workers" in the United States:

http://www.allpar.com/model/imperial.html

Gasoline cost equaled 1970 at $0.356 per USA gallon. Production workers in the USA worked an average of 36.9 hours per week at $3.45 per hour, for an average weekly total of $127.31.

Right now gas is hovering around $2.00-$2.40 a gallon where I am, depending on grade.  And according to the UAW:

"As of the second quarter of 2003, a UAW-represented assembler earns $25.63 per hour of straight time. A typical UAW-represented skilled-trades worker earns $29.75 per hour of straight time. Between 1992 and 2002, inflation-adjusted real wages for UAW-represented autoworkers increased by 13.5 percent. This is a compounded annual pay increase, after inflation, of 1.28 percent."

http://www.uaw.org/barg/03/barg02.cfm

Note that this number reflects JUST the wage rates, not the total labor cost including overtime, healthcare, pensions, etc.

I'll use $2.20 as my average gas price here in the city.   Since 1970, then, the price of gasoline has risen 618%  The salary for a UAW worker has risen by about 743% as of 2003.  So by a very rough first approximation, and not taking anything else into account, gas is still relatively cheap at least in the USA.  

A long time ago, one of the mathematically-minded editors at Car and Driver or perhaps Road & Track (I do not recall his name right now) wrote a nicely done column in which he opined that gasoline in the U.S. is still the cheapest gasoline in any country he'd like to live in.   That's still true, by and large, at least if you're an auto worker.  

On the other hand, if you're a single parent working at Wendy's, or if the price doubles...

BTW I think car-pooling is a great idea for large cities.  The problem I have seen with it so far is that nobody in the private sector has figured out how to provide a service helping people to carpool, perhaps through the Internet.  A few years ago I did some musing and late-night brainstorming with some friends about constructing a website that would let people, especially in urban areas and their immediately outlying suburbs, to coordinate and schedule their carpooling online.  We even imagined that the company could charge a fee for the service and actually make a profit, but that they would negotiate with city governments and municipalities to give participants in the program a break on their registration, license fees, or (as is the case in Chicago) city sticker costs.  As far as I know, there is still no such carpooling portal operating nationwide on the Internet -- a little surprising, because you would think in cities at least, people would be willing to give it a try to cut back on their daily wait times and the fuel costs.  If you could cut rush-hour traffic flow by even 15% it would make a big dent in that problem, I'll wager.  If anyone listening out there is a venture capitalist...you have my email address.  

Cheers,
Alex Kowalski
'87 5KCSTQ


> Message: 4
> Date: Sat, 05 Mar 2005 16:06:55 -0800
> From: Dan Cordon <cord4530 at uidaho.edu>
> Subject: NAC:  gas prices going up.....more...
> To: Quattro List <quattro at audifans.com>
> Message-ID: <422A499F.5020308 at uidaho.edu>
> Content-Type: text/plain; charset=us-ascii; format=flowed
> 
> > The big question is consumer behavior -- will the higher prices cause people
> > to alter their behavior enough to significantly reduce demand?  How
> > expensive does gasoline have to get before commuters start carpooling again?
> > Will $3/gal do it?
> 
> Most people won't agree with me, but I still say 'gas is cheap.' True, 
> it will continue to increase, and it's inevitable that in the semi-near 
> future (how's that for precise?) it will increase significantly. But 
> it's still cheap. Consider the amount of chemical energy in a gallon of 
> gasoline. And it only costs $2. (Okay, pretend it's $5 if you like) What 
> are your cheaper alternatives? (Electricity is cheap) Food (our primary 
> energy source as humans) isn't cheap. Filtered water (no chemical 
> energy) can be more expensive than gasoline.
> 
> I do a LOT of biking. Mountain (for enjoyment) and road (for 
> exercise/training). I ride to work at least 50% of the time in the 
> Spring - Fall. I *know* I eat way more $$$ in food than I would have 
> spent in fuel to drive the same distance.
> 
> Either way...carpooling is a great idea. In many places, public 
> transportation is simply outstanding! And many mopeds are getting over 
> 100 mpg. At $2/gallon, clearly gas is cheap.
> 
> But you won't find me on a bike or a moped in the winter. There's no 
> better car for me than the quattro for the snow/ice covered roads.
> 
> -- 
> Dan Cordon
> Mechanical Engineer - Engine Research Facility
> University of Idaho