Social Impact of Gas Price on American Price in American Society
In the last few years, the price of gasoline has increased above average in the United States, and in many part of the United States, the price of gasoline is above $3 per gallon. The data from the Department of Energy reveals that price of gas was $1.05 in 1999, and ever since, the gas price continues to increase. In 2005, the gas price was $2.05 per gallon, and $3 in 2007 and in some part of the country, the price of gasoline has reached $4 per gallon. (Johnson 1). The increase in gasoline price has led to several social effects on the American society. The objective of this paper is to investigate the social impact of the increase in the price of gasoline on American society.
Impact of Gasoline Price Increase on American Society
There are several social impacts that the fuel price increase cause to the American society.
First, the social impact on American society due to the increase in the fuel price is the decrease on the living standard of low-income earners in the United States. The sudden changes in the price gasoline have led to the increase in the transportation costs, and the results has led consumers end up paying higher retail prices. Due to the increase in the transport costs, companies that are more sensitive to the increase in the costs of transportation have started to embark on massive layoff to cut costs. The cumulative social effect has led to the decline in the living standard of Americans due to the increase in the fuel price. People living on low income are more at risks because they are likely to be at disadvantages because they will be living in poor environment and having access to poorer health.
The result of fuel poverty is that many Americans may end up not being able to pursue their education and there will be increase in college dropout because of the inability of Americans to pay the school fees. Typically, there will be decline in the number of Americans enrolling for college degrees because of the increase in the fuel price. The effect is that there would be the decline in the number of Americans having the degree certificates because of the inability to pay for the college tuitions. The effect may lead to the increase in the number of American engaging in drug related business or increase in the number of drugs addicts. With the increase in the college tuitions of American colleges and universities, many American will not be able to secure decent jobs because of lack of skills and required college certificates. Thus, much number of Americans will engage in the drug related business to boost their standard of living.
The fuel increase will also increase the poverty rates of some Americans. Baker argues that more individuals and families are likely to live in poverty level due to the increase in the fuel price. The effect is likely to be more pronounced among the low-income people. If there is cumulative increase in the prices of the goods and services without corresponding increase in the annual income of Americans, the results will lead to the increase in the poverty rates. (2). The report provided by the U.S. Census Bureau reveals that there has been gradual increase in the number of Americans living in poverty. In 2008, the poverty rates in the United States were 39.8 millions, and in 2009, the poverty rates increase to 43.6 millions. Between 2008 and 2009, the poverty rate increased from 8.6% to 9.4% among the non-Hispanic. There is also an increase in poverty level from 24.7% to 28.5% among the African-American. The poverty rate among the children under 18 has also increased. In 2010, the poverty rates among the Americans have increased by 15.1%. In 2010, there have been 46.2 millions American living in poverty. (14). The report provided by the Work Bank reveals that the increase in the poverty level among the Americans is due to the increase in the fuel price. Fig 1 reveals that there has been steep increase in the price of essential food between 2010 and 2011. Fig 2 also shows that with the increase in the price of fuel, there is also increase in the food price index. The overall effect is the increase in the poverty level among the American.
Fig 1: Prices of Food in U.S. between 2007 and 2011
Fig 2: Fuel Price and Price of Food in U.S. between 2007 and 2011
The effect is likely to be more pronounced among the elderly people, rural dwellers, and people living uniquely social benefits. Typically, many Americans will not be able to live in decent houses because of the increase in the fuel price because they will find it difficult to pay their mortgage as when due. Many people will also not be able to afford a new house due to the increase in the fuel price. The social effect is that there will be increase in the number of homelessness, and squatters. Housing is very important in the American society. Living in a decent house will enhance ability of the people to behave positively. Typically, many people living in the sub-standard houses are likely to engage in the criminal activities.
More social impact is that more Americans are likely to engage in the criminal activities because of the increase in the fuel price. With the increase in the unemployment rates due to the increase in the massive layoff, and drop out from college, many American youths are likely to engage in the criminal activities such as house burglary, bank robbery, internet crimes and other criminal activities in order to make ends meet.
Another social impact on American society with the fuel price increase is the changes of the driving behavior of American society. The increase in the fuel price has made American to drive their cars less frequently. According to the CBO study, every increase in the nominal price of gas price by 50 cents leads to decline of median speed of urban freeways by three-quarters per hour. The amount of the freeway traffic also declines with the increase in the gasoline price. In addition, there is increase in the number of commuters of rail system. Typically, the increase in the gasoline price leads to the decline in the use of personal cars, and consequently leading to the increase in the use of the public transports.
Another social impact of fuel price increase on American society is travel delay. The over-reliance on public transport could cause traffic congestion leading to the travel delay. Many Americans cannot do without travelling to their workplace. The over dependence on the public transports may lead to the delay on the time people arrive at their workplace. The increase in the time taken by an average American to reach their workplace may lead to the increase in the bullying at the workplace and consequent increase in the job termination. Report provided by the International Center for Technology shows that American companies record loss of $100 billions due to the travel delay in 1998.
Another social impact of fuel increase on American society is the decline of social standard of many Americans. Many Americans have reduced their living styles due to the increase in the fuel price. For example, there has been decrease in the way Americans purchase new cars with the increase in the fuel price. People earning the less than $25,000 per annual are likely to be affected by the increase in the fuel price. There would be decrease of new cars bought by the Americans earning below $25,000 per annum. There will be also decrease in the number of American paying new automobiles due to…