Recently, I filled up the tank at a local gasoline station and was again surprised at the prices of gas, unleaded being something like $2.699 a gallon. What a difference from prices back around 1960 when I was starting to drive my own car. Then, according to a little research done on the computer, prices for gasoline were about 25 cents per gallon. Four dollars worth (of the "cheapest stuff" I could buy) would about fill up the entire tank. Certainly much less expensive than today! It got me thinking.
Those were the good old days, but maybe not so much. It occurred to me that I was paying for this on my minimum wage rate of $1 per hour, or $40 dollars for a 40-hour week, with a weekly take-home of about $33. I remember filling up my old Studebaker about twice a week, about 24 gallons total, on the average, which cost around $6 per week. I divided that $6 by my take-home of $33 and got a percentage of 18 percent, which was the percentage of my weekly pay (on the average) that went into gasoline. I do not remember any public outrage of gas prices at all back then, certainly not to the extent that it seems to prevail today.
So I took today's gas prices, "the cheapest stuff" I could find, $2.699/gallon, used the Arizona minimum wage of today of $7.25, did the same math and found that the today's gas prices were about 28 percent of that minimum wage, 40-hour paycheck (with 20 percent withholding).
So on the surface, today's gas prices of 28 percent of a 40-hour minimum wage check take-home of about $232.00 is about 10 percent higher than the 18 percent I paid way back when. But this should not be the sort of difference that should cause as much anger and excoriating of gas companies along with panic purchases of emerging technology like alternative energy cars amongst the public as it seems to have created. Especially considering that the fuel cost percentage goes down as the amount of the take-home paycheck goes up. At about $350 take-home a week ($8.75 per hour), the gas price percentage hits 18 percent of the paycheck (for 24 gallons) the 1960 price of 25 cents that I remember. Interestingly enough, it is the people with the higher take-home wage that have way below 1960s percentages of their paycheck going to fuel who are buying the electric and hybrid cars. Minimum wage-earners don't qualify for new car financing.
But below the surface, there seems to be another factor at work here, and that is the value of the money you use to pay for the gas with. Say, for example, instead of a credit card or paper cash bills, you had a batch of silver dollars, (worth a dollar apiece in 1960) and which, being silver, of course, retain their 1960s value. If you used these today to pay for your gas by taking them to a coin collector shop and selling them to get the proper exchange in paper cash dollars, things would be different. Each silver dollar today is worth around $12 of today's money (call a coin shop and find out for yourself). That means that the 24 gallons of gas at $2.699 a gallon, paid for with the equivalent of 1960s value money, costs a total of $5.398. That's less than the $6 I paid for it on my '60s minimum wage of $1 per hour.
So, in the light of this, the price of gasoline still seems to be a bargain, and, in fact, may have gone down a little. Certainly, in the light of this, it is not enough to justify the extraneous panic buying of new alternative power vehicles and the creation and rabble rousing of so much public dismay.
It's the decreasing value of our currency that appears to be behind it all, and behind that seems to be the things that drive the prices up, and the dollar down; the result of some of our elected officials' love for expensive give-away programs, pork barrel projects, government personnel costs, and ever higher minimum wage rates.
Sure, these things may be nice and tempting, but in the end, it may not be possible to have them along with a higher value to our dollar.
It just could be that we will all have to pick and choose, and something will have to go.
So next time you're at the pump, fresh out of silver dollars, consider which way you would prefer things to turn.
John F. Hand