Rising California Gas Prices Hit Poor Hardest
The poor spend more on gas and have less efficient cars
Oct 8, 2012— -- California's gas prices skyrocketed over the weekend, setting a new gas price record and further increasing transportation costs placed on Americans -- especially the poor.
Low-income Latinos and other minorities, who are statistically more likely to be poor, spend a much higher proportion of their wages -- about four times as much -- on gas, a study by the Urban Institute found.
There's also a distinct impact on specific age groups.
"Because lower income people have older, less efficient cars, they have an added burden because they are going through their gas faster. Even if a commute is shorter, they may end up buying more gas," says Margaret Simms, director of Low Income Working Families Project, which is part of the Urban Institute.
In the last week, California gas has jumped 50 cents to $4.668 for a gallon of regular grade on Monday, according to AAA's daily reports.
A 12.8 cent jump Saturday, prompted California Governor Jerry Brown to take emergency steps to increase supply. Analysts estimate that the governor's action will help bring the price down about 20 cents, reported Gasbuddy.com.
Senator Dianne Feinstein (D-Ca) has also called for a federal investigation after traders frantically snatched up gas, driving the price even higher.
Even so, the increased cost of gas will continue to have a bigger impact on poor families, who already spend almost 10 percent of their incomes on gas.