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American Workers Pour 2005 Salary Increases Down Gas Tank

October 12, 2005
With Americans paying around $3 per gallon to fuel their sedans, sports cars, SUVs and pickup trucks, commuting to and from work is suddenly having a substantial impact on the pocketbooks of most American workers, with no end in sight.

This has led the compensation experts at Salary.com to put a salary dollar value on the rising cost of the American commute. The results may surprise you.

At the current gas price level and average fuel economy of 17.8 miles/gallon, average American workers, who earn the national average salary of $40,409, spend 3.3% of their paychecks ($1,341 per year) on gas needed to commute to and from work.

"And that's the average worker," says Bill Coleman, Senior VP of Compensation at Salary.com. "Consider workers making the national minimum wage of $5.15 an hour ($10,712 per year) who are currently spending 11.3% of their salary on commuting gas."

"Furthermore, $3.00, $4.00, even $5.00 per gallon gas prices no longer seem out of the question," said Coleman. "If gas prices happen to rise to $5.00 per gallon, workers can say good-bye to all of that yearly salary increase, plus more." A gas price rise to $5.00 per gallon would cost the average worker $2,384 per year, a whopping 5.9% of their salary.

In fact, some commuters, particularly in parts of upstate New York and south Texas, are already spending up to 4.6% of their salary on gas to get to and from work.

Salary.com calculated the effective gas price salary cut that workers are taking (by city) as a percentage of the average salary of that city.

Some of the highest gas prices in the nation, coupled with above average commute times, landed the upstate New York towns of Rochester and Albany into the top 5. The Texas city of Brownsville showed up at #1, mostly due to the fact that wages are not keeping up with rising gas prices.

Employees in some U.S. metropolitan areas may soon be forking over nearly 10% of their salary for gas needed to commute to and from work. If gas prices were to reach $5.00 per gallon, workers in a place like Brownsville, Texas, will be surrendering 8.7% of their salary for commuting gas.

What To Do?

Chances are that your human resources department is not going to give you a raise to cover your rising commuting costs. And not all American workers have a company car. So is there anything you can do, aside from taking the train, riding your bike, or putting your name on the list to buy a hybrid vehicle?

"Human Resource managers definitely empathize with their employees when they are forced to use parts of their total rewards package, like their annual merit increase, to cover things like rises in commuting costs," Coleman said. "However, your employer is unlikely to be able to increase every employee's compensation to cover the cost of gas."

"A more effective approach to ask for a raise would be to focus on your individual contributions and accomplishments - these are what an employer values and are where you can differentiate yourself. Proving that you are worth more in the marketplace is the best argument for a raise," Coleman said.

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