Arkansas HVACR NewsMagazine November 2021

News Magazine November 2021

FEATURE STORY

ago. Buying just a tank per week per vehicle, a single car family is out $64.50 per month. A two car family--- $129.00 and, as we said, there seems to be no end in sight. To maintain some sanity and not go into depression, let ’ s take a historical perspective — comparing the price of gas to today ’ s buying power based on the inflation index. In 1965ish I was driving my first car and feeling pretty important. Gas was less than $0.30 with price wars driving it down to $0.19. Oh for that day, but then wages were much less. According to the US Department of Labor, the minimum wage in 1955 was $1.00 with increases up to $1.25 in 1965. https://www.dol.gov/agencies/whd/minimum- wage/history My first “ public ” job compared to farm labor, paid $1.00 an hour. So how much was gas compared to 2015 buying power? $2.49. The following chart was compiled from the Energy Office, Office of Energy Efficiency & Renewal Energy. The chart stops at 2015 because that was where they stopped.

Comparing gas prices and today ’s minimum wage, presently at $11 and on its way to $15, there is an interesting picture. (I make this comparison for perspective when shocked about the price of a gallon of gas or the price of a burger.) Some of my numbers may be a bit mixed but serve the purpose of perspective.

Year

Pump Price

2015 $s

Minimum Wage

1965 2015

0.30 2.49

1.76 2.49

1.25 7.25

Of course, we live in 2021 and things — they are changing. Gathering data and making our own chart, we find--

Recent Arkansas

Year

Pump Price

2021 $s

Minimum Wage

2021

3.01

$3.01 11.00

Even with soring inflation, the comparative price of 2015 gas should only be $2.88 yet we stand at $3.01. OK, this is an exercise in “ DUH ” . We know that gas is high and there is no end in sight. Discounting income taxes and only using gross income, a minimum wage earner in 1965 could purchase 4.166 gallons of gas. In 2021 a minimum wage earner can purchase 3.654 gallons of gas. That is about 12% less fuel in the tank on minimum wage. We all knew in April 2020 that gas could not stay at $1.47/gallon. We just had no idea that it would rise so much so fast. That is the kicker. We were enjoing crazy low gas prices in a

Year

Pump Price

2015 $s w/ inflation index

1935 1945 1955 1965 1975 1985 1995 2005 2015

0.19 0.21 0.29 0.30 0.53 1.13 1.15 2.30 2.49

2.54 2.12 1.98 1.76 1.81 2.10 1.62 2.66

2.49 https://www.energy.gov/eere/vehicles/fact-888- august-31-2015-historical-gas-prices