Originally posted by: dmcowen674
8-17-2005
High gas prices widen divide between rich and poor
Though the current price spike is unlikely to generate stagflation or bring back WIN (Whip Inflation Now) buttons, it is being keenly felt by low-income workers, who spend a larger portion of their income on necessities such as food and fuel. For someone who drives 15,000 miles a year and gets 20 miles per gallon, a 60-cent jump means an extra $450 a year at the gas pump.
Though that might not seem like such a big deal to those in the more comfortable classes, it's far from trivial for workers already struggling with soaring costs for housing and health care.
Consider the cruel calculus of rising fuel prices faced by low- and moderate-income workers in high-priced communities. Many have been forced in recent years to commute longer distances because of rising housing costs. Now, they have to pay more to commute.
Rising fuel prices will have some impact on overall spending patterns. Money that goes into tanking up is money not spent at Best Buy, Wal-Mart or Starbucks. Energy-consuming industries such as airlines and trucking will suffer.
But the biggest impact of rising costs might be social rather than economic. They will accentuate the growing divisions between those eking out a living and those who find themselves well-off.