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Opinion: Our Gas Prices Are Way Too Low

October 4, 2017 Economy, Featured, Transportation Comments Off on Opinion: Our Gas Prices Are Way Too Low

Gasoline here in the U.S.is cheap compared to much of the world.

The average price of gasoline around the world is 4.09 U.S. Dollar per us gallon. However, there is substantial difference in these prices among countries. As a general rule, richer countries have higher prices while poorer countries and the countries that produce and export oil have significantly lower prices. One notable exception is the U.S. which is an economically advanced country but has low gas prices. The differences in prices across countries are due to the various taxes and subsidies for gasoline. All countries have access to the same petroleum prices of international markets but then decide to impose different taxes. As a result, the retail price of gasoline is different. (GlobalPetrolPrices)

Comparing gas prices alone doesn’t tell the full picture. For that I turned to a handy Bloomberg site,

Global gas prices are on the decline—about 2.3 percent, on average, in the past three months. Behind that modest decrease is a wide range of price swings felt differently around the world. We ranked 61 countries by three economic measures to see which has the most affordable gas and which feels the most pain at the pump.

It listed the US is the third most affordable — behind Venezuela and Saudi Arabia. Initially I decided to limit myself to the G7 countries:

Canada

Canada is seeking to restore its image as a leader on global warming with a nationwide tax on carbon pollution. The country has a lot to lose: Vast reserves of difficult-to-extract oil will mean either an environmental toll to produce it or an economic toll to keep in the ground. Cheap gasoline in Canada goes hand in hand with high consumption—only Americans use more per person.

France

The French can afford to pay for their expensive gasoline, but they’re increasingly turning to electric cars instead. French automakers Peugeot and Renault are both competing in the expanding market for EVs. France has one of the world’s highest EV sales rates and one of the densest charging networks.

Germany

German gas isn’t exactly cheap, but it’s little bother for the average driver in Europe’s largest economy. Gas consumption is average and is likely to decrease as the country commits to battery-powered cars. Incentives were introduced for car buyers in 2016, and BMW and Volkswagen are now working to electrify their fleets.

Italy

Car ownership in the home country of Ferrari and Maserati is among the highest in the world. However, the prolonged slump in global oil prices offered less relief to Italian drivers than in most countries, largely because of the country’s high taxes on fuel.

Japan

Japan’s long-standing national gasoline tax helped its carmakers take an early lead in developing fuel-efficient vehicles. Toyota and Honda invested big in fuel-cell technology, while the Nissan Leaf became the world’s best-selling electric vehicle. Japan now has more public battery chargers than gas stations.

United Kingdom

Sales of electric vehicles are accelerating in the U.K.—one of the biggest markets for battery-powered transportation. EVs make a lot of sense in a region defined by short driving distances and one of the highest gasoline prices in the world.

United States

President Donald Trump has scrapped environmental regulations and supported fossil-fuel production in the first months of his presidency. But if success is judged by the price of gasoline, there isn’t much room left for improvement. U.S. gasoline prices tumbled under his predecessor, Barack Obama, while oil production soared and cars became more efficient. Americans still guzzle more gas than any other country, so even with low prices, a thirst for the open road takes a bite out of the average paycheck.

I then decided I needed to also look at the country with the most expensive gas and the two where gasoline is more affordable than here:

Norway

Norway’s high gas prices and high incomes are an electric car maker’s dream. The country has the biggest share of electric vehicles in the world. That may seem strange for an economy built on oil, but Norway is one producer that doesn’t subsidize gasoline at the pump. Instead, the country uses its oil riches to fund national services, such as free college education and savings for infrastructure improvements.

Saudia Arabia

The Saudis sit atop two enormously valuable bodies of liquid: oil and water. Both are being pumped to the surface at unsustainable rates. Saudis rank among the greatest gas guzzlers in the world, but they devote a below-average share of their incomes to buying it. That’s because the government heavily subsidizes the price at the pump.

Venezuela

Life, liberty and the pursuit of happiness. Countries have different ideas as to which rights are inalienable, and Venezuela stands alone in considering nearly free gasoline a birthright. In 2016, President Nicolas Maduro raised pump prices 6,000 percent, but filling up a tank of gas still costs less than a cup of coffee. Venezuela isn’t a rich country but consumes gas like one.

I complied some of the information into a chart — looking at price per gallon, affordability relative to wages, gallons used per driver, and how each compares to the highest user of gasoline.

As you can see four other G7 countries (France, Germany, Italy, UK) have gas prices that are at least twice ours. Twice. We use far more gasoline than everyone else — even the two countries with more affordable gasoline.

The recent non-scientific Sunday Poll had fewer responses than usual:

Q: Current gas prices in St. Louis, at around $2.27/gal, are…

  • Extremely high 0 [0%]
  • High 1 [5%]
  • Somewhat high 1 [5%]
  • Neither low or high 7 [35%]
  • Somewhat low 4 [20%]
  • Low 3 [15%]
  • Extremely low 4 [20%]
  • Unsure/no opinion 0 [0%]

Still, more than half said our gas prices are on the low side of the scale. Decades of low taxes enabled us to build a non-sustainable auto-centric built environment. We can’t just raise taxes to where they should be, at least not too quickly. But we can’t continue to neglect our massive amount of crumbling infrastructure.

— Steve Patterson

 

Readers: Gov Greitens Should Veto Minimum Wage Bill

May 24, 2017 Economy, Featured, Missouri, Politics/Policy Comments Off on Readers: Gov Greitens Should Veto Minimum Wage Bill
Missouri Capital, Jefferson City, MO, April 2011

Nearly 85% of those who voted in the recent non-scientific Sunday Poll disagreed with the statement that Gov Greitens should sign the bill that would strip St. Louis of setting its own minimum wow higher than that of the state. More than half picked the “strongly disagree” option.

Here’s the final breakdown:

Q: Agree or disagree: Gov Grietens should sign the bill limiting the minimum wage to the same $7.70/hr statewide.

  • Strongly agree 2 [6.25%]
  • Agree 1 [3.13%]
  • Somewhat agree 1 [3.13%]
  • Neither agree or disagree 0 [0%]
  • Somewhat disagree 3 [9.38%]
  • Disagree 7 [21.88%]
  • Strongly disagree 17 [53.13%]
  • Unsure/No Answer 1 [3.13%]

A thriving economy has goods/services being exchanged at good pace. Those with minimum wage jobs spend every dollar they get:

Those in the bottom 30% of the income scale make an average of $14,000 a year, including the value of many government benefits like food stamps or disability payments. But they spend more than $25,000, or 182%, of their annual income mostly on basic needs like housing, food and transportation, according to a CNNMoney analysis of Bureau of Labor Statistics data. 

Worth noting is that this group includes senior citizens, who supplement their income from Social Security with savings, and students, who turn to mom and dad for help. Also, research shows that some underestimate how much aid they receive from the government. 

But the data also includes many low-income families and individuals who just don’t make enough to get by. Often, they have to decide what bills to pay or they turn to payday lenders or credit cards. (CNN/Money)

This is 182% of their income, while the rich only spend 61% of their income. For the middle class it’s 89%. If we pay those at the bottom a little more the money will circulate through the economy — not sit in accounts here and abroad. Foe nearly 40 policies of both Republicans & Democrats have eroded the middle class and condemned the poor to a life of struggling to stay afloat.

St. Louis needs an improved economy — paying workers more is the best way to do so. Please contact Gov Greitens immediately and let him know he should veto the minimum wage bill.

— Steve Patterson

 

Opinion: Minimum Wage Hike Will Benefit City Long-Term

March 8, 2017 Economy, Featured Comments Off on Opinion: Minimum Wage Hike Will Benefit City Long-Term
2013 Picket in front of Wendy’s in Rock Hill on August 26th

Poverty is a major problem in the region — especially in the City of St. Louis, from January 2014:

The Missourians to End Poverty coalition released a report Wednesday showing that poverty was up in the St. Louis area and statewide. In St. Louis County, 12.1 percent of the population was impoverished in 2012, up from 11.9 percent the previous year, according to the report. In the city of St. Louis, 29.3 percent of residents were impoverished, an increase from the 2011 figure of 27.2 percent.

Poverty in the state increased in 2012 to 16.2 percent — or nearly 948,000 people — from 15.8 percent in 2011. (Post-Dispatch)

It’s true that poor people spend nearly every dime they get — budgets just aren’t big enough for saving.  Low-wage workers who get a few bucks extra per week will put that money back into the local economy. Granted, some short-sighted employers will scale back employee’s hours to keep them impoverished. Reduced employees can lead to lower service and customer dissatisfaction.  Still other employers will accept reduced profit margins because their revenue & profits depend on billable hours.

Crime is often a result of poverty conditions, so reducing poverty is a way to reduce crime. I know many of you see this increase in the minimum wage as a disaster. I think it’ll actually not be a significant of a shift either way, though I do think the long-term prospects are good provided wages increase beyond 2018’s $11/hour.

Readers who voted in the Sunday Poll were split, with the agree/disagree trading places throughout the day:

Q: Agree or disagree: The increase in St. Louis’ minimum wage will be a long-term net positive for the city.

  • Strongly agree 12 [25%]
  • Agree 12 [25%]
  • Somewhat agree 5 [10.42%]
  • Neither agree or disagree 2 4.17%]Somewhat disagree 5 [10.42%]
  • Disagree 5 [10.42%]
  • Strongly disagree 6 [12.5%]
  • Unsure/No Answer 1 [2.08%]

I refuse to buy into the widespread job loss fear-mongering from those who want to keep people impoverished.

— Steve Patterson

 

Credit Card Technology Changes Today

October 1, 2015 Crime, Economy, Featured, Retail 3 Comments
By May 2014 the Target on Hampton had these new readers with an EMV slot
By May 2014 the Target on Hampton had these new readers with an EMV slot

Our current credit & debit cards are different than they were decades ago. In the mid-80s, during high school & college, I worked at Toys “R” Us and Dillard’s. In those days we made an impression of the credit card to document the transaction, the credit card number was entered manually to get approval. Sometimes we had to call in to get an authorization number.

The magnetic strip on credit cards came later, greatly simplifying transactions.   The technology was developed in the late 60s, but it took a long time to get ir on credit cards and for retailers to be equipped to swipe cards rather than complete an embossed charge receipt. Eventually the magnetic strip became ubiquitous. Criminals also found many ways to exploit the weaknesses.

The magnetic stripe on credit cards — which fraudsters can pull credit card numbers and expiration dates from to make counterfeit cards. (NPR)

NPR continues:

Other countries moved beyond this technology years ago. The U.K., Canada and Hong Kong are already using chip-based cards, which are considered more secure. (Magnetic stripe technology is decades old.) Cards using the chip-and-PIN system have an embedded microchip. Instead of swiping the part with a magnetic stripe, you put the card into a terminal, then enter a PIN or sign your name. It’s more expensive for criminals to forge these cards, says Brian Krebs, a security journalist who writes for Krebs on Security and broke the story on the breach at Target.

Several of our cards have the new chips, called EMV:

EMV chip technology is becoming the global standard for credit card and debit card payments. Named after its original developers (Europay, MasterCard® and Visa®), this technology features payment instruments (cards, mobile phones, etc.) with embedded microprocessor chips that store and protect cardholder data. This standard has many names worldwide and may also be referred to as: “chip and PIN” or “chip and signature.” (Chase)

In 2013 local grocery chain Schnucks was breached, leading many to stolen credit card numbers. National retailers were also hacked. October 1, 2015 — today — was set as a deadline to switch to the EMV cards. However, this wasn’t a government mandate.

After an Oct. 1, 2015, deadline created by major U.S. credit card issuers MasterCard, Visa, Discover and American Express, the liability for card-present fraud will shift to whichever party is the least EMV-compliant in a fraudulent transaction. (CreditCards.com)

So retailers have been updating their credit card terminals to prepare for today’s deadline. Yesterday, at IKEA, the restaurant cashier put my EMV-chip card in the slot rather than swipe it. Later, at FedEx Office (aka Kinko’s) the terminal had the slot but the employee didn’t know when it would be activated. Target recently sent us new EMV RedCard debit cards — but not the RedCard credit cards we currently use.  We just got a new credit card within the last couple of weeks — it didn’t include an EMV chip. Yesterday the issuer said we’d have replacements by the end of October with EMV chips.

Some retailers, in updating their terminals, have added NFC/contactless capability.

NFC (near-field communication) allows two devices placed within a few centimeters of each other to exchange data. In order for this to work, both devices must be equipped with an NFC chip. 

In the real world, there are a essentially two ways this works. 

Two-way communication: This involves two devices that can both read and write to each other. For example, using NFC, you can touch two Android devices together to transfer data like contacts, links, or photos. 

One-way communication: Here, a powered device (like a phone, credit card reader, or commuter card terminal) reads and writes to an NFC chip. So, when you tap your commuter card on the terminal, the NFC-powered terminal subtracts money from the balance written to the card. (CNET)

My husband’s iPhone has been able to utilize this technology for payment for a year, I just got a new iPhone with this ability — ApplePay. Others include Google Pay & Samsung Pay. Confused yet?

Basically you want to avoid your cards being swiped. You want to use cards with a chip by inserting them in the chip readers. Not all retailers have to meet today’s deadline. Gas pumps, for example, have until 2017 to be updated.

If you accept credit cards you need to be working on updating ASAP, and training staff to insert EMV cards rather than swipe them. If you use plastic, be aware of the differences and how to use them, If your smartphone can make contactless payments I’d suggest using that. Samsung Pay will even work with older magnetic stripe terminals.

While we have these new EMV cards, our issuers don’t yet have the PIN number portion set up, so they’re Chip & signature for now.

— Steve Patterson

 

Readers: Room Rental Should Be Allowed

September 16, 2015 Economy, Politics/Policy 1 Comment

The results of the nonscientific Sunday Poll show support for short-term room rentals:

Q: Many St. Louis area municipalities frown on residents renting a room(s) for a few days at a time to strangers, similar to a hotel. Thoughts?

  1. Room rental should not be regulated, should be allowed 16 [51.61%]
  2. Boarding houses were outlawed for good reason 10 [32.26%]
  3. Unsure/No Opinion 4 [12.9%]
  4. Other: Compromise option: Have some regulation & education but otherwise leave open. 1 [3.23%]

This issue is being debated in one of 90 municipalities in St. Louis County:

Airbnb could be coming here after all.

The Maplewood City Council on Tuesday gave tentative approval to a measure to allow “short-term vacation rentals” in the residential district and to another that would establish regulations on them.

Last month when a motion to delay a bill to allow short-term rentals failed, City Manager Martin J. Corcoran said it couldn’t be reconsidered for six months. However, on Tuesday he said he misspoke in August and the delay wasn’t necessary. Therefore, the council considered the measure again. (Post-Dispatch)

Thoughts?

— Steve Patterson

 

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