Good news! According to the U.S. Energy Information Administration, Americans had to spend only 4% of their pre-tax income on gasoline for their cars in 2012 — a sum that hasn’t increased since seven years ago.
Horrible news! According to the same U.S. Energy Information Administration, Americans had to spend a whopping 4% of their pre-tax income on gasoline for their cars in 2012 — which works out to $2,912. That’s the most dollars Americans have had to spend on gas at any time in the past 30 years.
So … which is it? Is this revelation from the EIA good news or bad news? Obviously, it depends a bit on how you look at it (and on which qualifiers you put inside the parentheses). For example, one way to put the EIA’s figures in a positive light is that, if the dollars spent go up, but the percentage of income those dollars represent stays flat … logically, this must mean people are earning more dollars from their jobs. So even if it doesn’t feel like it for many of us, apparently, wages have gone up!
You can also take heart from the fact that, even if the dollar figure of $2,912 sounds bad — “$2,912? Why, that’s a couple of mortgage payments!” — it could have been a lot worse.
According to the University of Michigan’s Transportation Research Institute, improvements in fuel efficiency in American cars have improved fuel economy by 40% since 1970. What’s more, nearly half of those efficiency gains — 17.8% — have taken place over just the past five years. Had they not, then Americans could easily have spent as much as $3,430 on gas last year. That would have been close to 7% of pre-tax income, and easily the most we’ve ever spent on gas, as a percentage of income, as gross dollars — really, by just about any measuring stick you care to use.
Give ’em a hand
Rant all you want about the greedy executives at Exxon Mobil Corporation (NYSE:XOM) and the $44.9 billion in profits they raked in last year, but when you look at those efficiency figures, the question of “who’s to blame for us spending so much money on gas?” quickly switches to “whom should we thank for saving us so much money?”