While US consumers are complaining about getting pinched at the pumps, we should have no reason to gripe compared to other countries around the globe…
According to the Federal Reserve, America is doing fine.
(Despite the facts that millions of people are unemployed and 47.6 million people are on food stamps — but more on that another time…)
A couple weeks back, the Fed reported that US household wealth rose to a record $81.8 trillion in Q1 2014 — an increase of $1.5 trillion from last quarter.
The Fed cited historic highs for stock markets and the spike in home prices as key drivers for the rise in household wealth.
Tighter saving habits and gains through retirement and pension plans also attributed to the growth.
This is in stark contrast to 5 years ago, when overall wealth sunk to $55.6 trillion in Q1 2009. Prior to the recession, household wealth in America stood at $68.8 trillion.
And yet, even with this supposed growth in household wealth, average Americans don’t seem to get any richer.
We feel it when grocery bills get more expensive. We feel it when students are forced to pay exorbitant fees to get a college education. And we especially feel it when gas prices rise. In fact, even a small increase in gas prices is considered a major hit to our wallets.
In data compiled by Bloomberg, Americans are the biggest gasoline consumers in the world, with the average person burning through 1.2 gallons per day.
That’s 31% more than second place Canada.
The full data set can be found here: http://www.bloomberg.com/visual-data/gas-prices/20142:United%20States:USD:g
But are we out of line when we gripe about rising gas prices?
Out of 61 nations, Bloomberg ranks the US #51st, whereby making us the 10th cheapest country for fuel at an average price of $3.69 per gallon.
Compare that to the folks who live in Norway. They are forced to pay an average of $9.79 per gallon, tops in the world.
And when it comes to affordability, Bloomberg believes we really have little to complain about.
Americans only require a meager 2.45% of a day’s wage to buy a gallon of gas, which places us near the bottom of the list at #56. In Pakistan and India, it takes well over a person’s daily income to obtain a gallon — 114.92% and 110.35%, respectively.
We also spend 2.99% of our annual income on gasoline, which ranks us 9th highest among all the countries, with the biggest spender being South Africa at 4.62% of their annual pay.
So in other words, according to Bloomberg’s data, we should be happy with domestic gas prices.
But before people start praising Bloomberg’s excellent investigative reporting, I’d like to weigh in with my two cents.
Sure gas prices may be highest in Norway. And gas prices in Pakistan and India are barely affordable.
But rising fuel prices have historically led to increased inflation and reduced economic growth.
And when a country like ours must depend on 18.89 million barrels of oil per day to achieve the world’s highest GDP of $16.8 trillion, even small changes in prices can have drastic effects on our economy and by extension, many other countries across the globe.
So yes Bloomberg editors, every time domestic gas prices go up, we get mad. But as the world’s largest and most important economy, I believe we have a right to.