Salary.com Reports That American Workers Are Pumping Entire 2005 Pay Increases Down the Gas Tank

Salary.com, the compensation experts, released a new report that calculates the financial impact of soaring gas prices on the majority of U.S. workers’ cost to commute, based on annual salary. According to Salary.com, the average worker today pumps 3.3 percent, or $1,341, of their annual salary into their gas tank, an increase of nearly 50 percent from October 2004, when gas averaged $1.91 per gallon. In effect, the average U.S. worker’s 2005 pay raise of 3.7 percent (reported by Salary.com in a February 22, 2005 press release) is nearly wiped out, leaving only a few dollars left over. Furthermore, if gas prices hit the formerly unthinkable $5.00 a gallon sometime in the near future, U.S. workers will be spending nearly 6 percent of their annual salary on gas needed to commute.

At the current gas price level ($2.81) and average fuel economy of 17.8 miles/gallon, average American workers, who earn the national average salary of $40,409, spend 3.3 percent of their paychecks ($1,341 per year) on gas needed to commute to and from work. “And that’s the average worker,” says Bill Coleman, Senior VP of Compensation at Salary.com.

“The reality is that while every commuter is experiencing a financial hardship with increases in gas prices, those individuals earning the minimum wage of $5.15 per hour are being the hardest hit, with a whopping 11.3 percent of their salary being pumped into their gas tank annually,” according to Coleman.

Nationally, commuters in Brownsville, Texas are the hardest hit by rising gas prices, pumping 4.6 percent of their annual salaries down their gas tanks. Number two is Rochester, New York at 4.5 percent, while tied for third at 4.4 percent are Honolulu, Hawaii and Riverside, California. Rounding out the top five is Albany, New York at 4.3 percent. For the full list of the most expensive metro areas for commuters, as well as other results from Salary.com’s study on gas prices and salary, log onto http://press.salary.com.

How Can Workers Cope?
Chances are that your Human Resource department is not going to give you a raise to cover your rising commuting costs. And not all American workers have a company car. So is there anything you can do, aside from taking the train, riding your bike, or putting your name on the list to buy a hybrid vehicle?

According to Bill Coleman, senior vice president of compensation at Salary.com, “Human Resource managers definitely empathize with their employees when they are forced to use parts of their total rewards package, like their annual merit increase, to cover things like rises in commuting costs.”

However, your employer is unlikely to be able to increase every employee’s compensation to cover the cost of gas. Coleman notes, “a more effective approach would be to focus on your individual contributions. Proving that you are worth more in the marketplace is the best argument for a raise.”

One way to assess your current earning potential is Salary.com’s premium service called The Personal Salary report at http://psr.salary.com. The Personal Salary Report will help you determine your value, based on job title, industry, geography, company size, education, experience and other personal factors. Now may be the best time to try to secure a raise to perhaps cover those extra dollars you are spending at the gas tank.