It won’t officially begin until next month, but for all practical purposes, summer gets underway this weekend, as many Americans enjoy an extra day off, turn up the a.c. and start making summer vacation plans.
Traditionally Memorial Day is also a time to take stock of domestic gasoline prices as a way to assess the economic health of both the country at large, and all those individual households looking forward to a family road trip. This year, it doesn’t look so good. Although prices have started to decline from a peak reached in April, they’re still way up there.
At the same time that we ought to cheer the modest price decline seen in recent weeks, we also must stay mindful of the bigger picture: Prices have been well above historic norms for most of this year and as we approach the halfway mark on the year 2011, that is starting to have a cumulative effect. Wal-Mart Stores, the nation’s largest retailer, recently disclosed that these higher gas prices are affecting its business in multiple ways. First, consumers are forgoing shopping trips because they can’t afford the gas, but also, prices for all sorts of consumer goods, including food, have been pushed higher as a result of soaring fuel costs. Check out CEA’s Facebook page for good testimonials from Americans struggling with high gasoline prices.
This summer, some very fortunate Americans will plan elaborate trips cross country or abroad, with nary a thought to the cost of jet fuel. Those are the same people – many of them Washington policymakers – who may be hard pressed to understand the significance of $3.80, or $4-a-gallon gasoline. That’s because the issue of gasoline prices is a highly populist issue, one which has a disproportionate impact on middle and low-income groups. This report on Wal-Mart Stores, which serves so many low and middle-income consumers, offers some good data: America’s poorest families spend almost 10% of their incomes on gasoline; the richest families spend less than 2%. Gasoline prices impact all of us, but for many people, they are crushing. Our national energy policies ought to be designed to serve all Americans.