Mark Perry at the American Enterprise Institute published this chart last week that puts the impact of low gas prices into very interesting perspective.
He looked at the effect of lower gas prices, combined with average fuel use and average hourly wages over time.
The chart plots how many hours the average worker needs to clock in to buy 100 miles worth of gasoline.
It’s currently 27.2 minutes of work, the lowest since 1999. By Perry’s estimate, a further 26 cents decline (to $US2.10) in the price of gas per gallon would be the cheapest in history, adjusted for fuel use and wages.
Drivers in over a dozen US cities are already paying less than $US2 for a gallon of gasoline, according to GasBuddy, a price tracker. Thanks to cheaper oil, gas prices have plummeted in the last few months, putting more discretionary income in consumers’ pockets.