Lower-income households are paying nearly a quarter of their income for energy costs.
The 27 million lower-income households earning between $10,000 and
$30,000, representing 23% of U.S. households, will allocate 23% of
their 2011 after-tax income to energy, more than twice the national
average of 11%.
Minority households are disproportionately impacted by higher energy costs.
In 2009, 62% of Hispanic households and 67% of black households had
average annual incomes below $50,000, compared with 46% of white
households and 39% of Asian households. Energy costs represent a much
larger fraction of disposable income for households earning less than
$50,000 than for wealthier families. Due to these income inequalities,
the burdens of energy price increases are imposed disproportionately
on black and Hispanic households.
This makes sense, since lower income Americans are more likely to live in older, much less energy efficient homes or apartment buildings. Refitting an older home with new windows and doors, attic and wall insulation, and a new HVAC system starts at around $20,000, which is completely out of the question for a household getting by on less than $50k a year.
The same thing is true with respect to automobiles; lower income families are more likely to drive older, less fuel efficient cars. They are also more likely to keep older, poorly maintained cars on the road for longer periods of time, since adding a quart of oil once a week to a worn out engine is less expensive on a short term basis than buying a new car.
Naturally the government’s solutions for these problems were utter failures. “Cash for Clunkers” provided cash incentives for new car purchases only, which were still far out of the reach of poor Americans, particularly during a historically deep recession. The program also destroyed hundreds of thousands of serviceable cars, resulting in higher prices for good used cars, yet again hurting the poor. And what of the billions of Stimulus dollars allocated by Congress for home weatherization projects and energy efficient systems upgrades in public buildings? Nothing more than a colossal waste of money, completely bogged down by bureaucratic red tape and with very little real progress to show for it.
Liberals seem to have trouble understanding why keeping down the cost of energy (which is most easily accomplished by maximizing efficient extraction and refining of domestic fossil fuel supplies) is such a high priority for conservatives. The answer is simple — energy is so deeply integrated into our society that a huge spike in energy prices will effect everyone, especially those who have the fewest alternatives available to them.
You know, “the poor.”
ADDED: I had this additional story in my stack of stuff, but I didn’t have time to write the post I had planned. But thanks to the AP’s stupidity, this story has completely blown up, so it’s worth mentioning briefly.
Yesterday, President Obama took questions from the audience during a speech he made in Philadelphia. One of the audience members was concerned about the high cost of gas. This was the President’s reply, as reported by AP:
Obama needled one questioner who asked about high gas prices, now averaging close to $3.70 a gallon nationwide, and suggested that the gentleman get rid of his gas-guzzling vehicle.
“If you’re complaining about the price of gas and you’re only getting eight miles a gallon, you know,” Obama said laughingly. “You might want to think about a trade-in.”
Woah. That’s got to be the epitome of callousness, blaming the American people for the suffering they are enduring because of high gas prices. As if any of us could afford to just waltz into a car dealership and drive away in a new car.
AP must have figured that out as well, because the quote was completely scrubbed from later editions of the story, with no explanation or correction notice.
Instapundit has the details, along with video of the President’s answer, and asks, “Think we’ll see this in a campaign commercial?”
Yep. And I’ll bet the RNC is putting it together right now.