Fast Company

As Gas Use Declines, Americans Still Spend More On Gas

A new report outlines the insidious "energy trap," a spiral of gas costs that poor people--forced to live far from their jobs and unable to invest in clean cars--fall into. Here's how to break it.

If you have to commute to work, and don’t live in an area with good public transportation, there’s not much you can do when gas prices rise except bite the bullet and pay more. With unemployment hovering around 9% and middle-class incomes stagnant, few people can afford an electric car or get a new job closer to home. The result? Low- and middle-income Americans are finding themselves spending an ever larger percentage of their income on gas, even as they have less money to spare.

That’s the frustrating conclusion of a new report from the New America Foundation called The Price-Induced Energy Trap: Exploring the Impacts of Transportation Expenditures on the American Economy.

According to the report, by the end of 2011, Americans will have spent more than $490 billion on gas--more than in any previous year and $100 billion more than in 2010--despite a projected decline in gas consumption.

Most shocking, however, is how this "energy trap" affects low- and middle-income families who live in rural areas where there aren’t alternatives to driving. In 2008, when gas prices shot up to roughly $4 per gallon, residents in big cities could adjust by taking public transportation. But in Montana, gas ate up 19.3% of the median income. In Mississippi it was 18.8%.

High unemployment can make the energy trap worse, because people are forced to drive more to find work. Darren, in the video below, spends a full 51% of his income on gas and other car-related expenses now that he works two jobs.

According to the report, families that are squeezed especially hard by transportation costs find themselves with less money for things like medicine and education, which sets them up for even more economic hardship later on.

So what’s the solution? The report’s authors recommend expanding bus service, giving people low-interest loans to buy fuel-efficient cars, and making it easier for entrepreneurs to enter the transportation market.

But eventually, we’re going to need to somehow break the gas habit for good.

[Image: Flickr user Kansas Poetry (Patrick)]

Add New Comment

2 Comments

  • Kymberlaine Banks

    Needing to break the gas habit for good should be a top priority in every political arena. Oil companies posted record breaking profits again this week. This makes absolutely no sense. Why are we paying the most ever for gas?

  • michellegirlie

    High unemployment can make the energy trap worse, because people are forced to drive more to find work. Darren, in the video below, spends a full 51% of his income on gas and other car-related expenses now that he works two jobs.
    make $85/hour on the computer. like my sister sherry has been without a job for 7 months but last month her check was $7330 just working on the computer for a few hours. I started 5 days ago and am doing great! Read about it here: lazycash5.c@m(replace @ with letter 'o')