Quit griping about gas prices
By some measures Americans are paying half of what they did in 1980.
By Steve Hargreaves, CNNMoney.com staff writer

NEW YORK (CNNMoney.com) -- Most Americans think they're paying a lot for gasoline. But by some calculations they have it easy.

Not only is the recent price per gallon lower in real terms than the high hit in 1980, the recent price also represents a lower percentage of the average worker's income.


Nationwide, gas recently averaged around $2.60 a gallon - the inflation-adjusted high in 1980 was around $3.15.

Moreover, in 1980, the average American had to work 105 minutes to buy enough gas to drive the average car 100 miles, according to David Wyss, chief economist at Standard & Poor's. By 2006, the average American needed to work only 52 minutes, thanks in part to better fuel efficiency but mostly due to higher wages.

"The question is: Why is the U.S. economy handling the oil shock so well this time," asked Beth Ann Bovino, a colleague of Wyss' at S&P. "And the answer is the economy is much different."

This comparative bargain for gas could also be a reason gasoline demand has defied economists' predictions and continued to grow in the face of rising prices.

But while this may be good news for people who snapped up SUVs in the late 1990s, it's bad news for anyone seriously concerned about carbon emissions and global warming.

"If you think higher gasoline prices are a replacement for a real federal policy to reduce consumption, you're sadly mistaken," said Ronald Hwang, vehicles policy director at the Natural Resources Defense Council.

Higher gas taxes aren't the answer, said Hwang, because they would disproportionately impact the poor and be toxic for politicians.

Instead, Hwang calls for higher fuel standards and other measures to force automakers to produce more efficient vehicles.

Drastically higher fuel efficiency standards is something the auto industry opposes, saying it would be costly to both themselves and consumers and that market forces should be the main tool in bringing down gas demand.

"We offer a great number of choices," said Charles Territo," a spokesman for the Alliance of Automobile Manufacturers. "But we believe it's up to consumers to decide what works best for them."

The motorists association AAA also called on manufacturers to make more efficient cars.

AAA generally dismissed Wyss' work as an interesting exercise but having little practical use, saying consumers' budget choices are based on the near term price of gas and they certainly feel pinched when it goes up.

"In very real terms people are hurting," said Robert Sinclair Jr., a spokesman for AAA New York. "All the number adjusting you make doesn't take away from that fact."

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$70-a-barrel oil still forecast

Bailing on Big Oil Top of page

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.