I think this is the beginnings of an economy based on perpetual growth and fossil fuel energy running headlong into geological energy constraints. Basically I see an undulatory downward path for the rest of my life. From here out, I think any rallies in our economic condition are going to be met with spiking commodity prices that knock us right back down.
Posted: Sun May 15, 2005 12:11 am Post subject: Economics of long commutes
I live in NJ just a few miles from where I work. I drive maybe 50 miles a week for commuting and maybe another 100 for personal use. I get gas twice a month, and sometimes only once in a month. Most other people I know get gas every fourth day or thereabouts.
About 10 yrs ago when I entered the work force I realized that lots of folks were commuting in to NYC and the northern NJ industrial and office park areas from as far away as the Pocono mountains in PA, Putnam County in NY, and Toms River at the Jersey Shore. Now since not everyone on this board is from NJ, those areas are approximately 75 miles due west, 50 miles north, and about 75 miles south of NYC. The decreased housing costs, lower property taxes, and hypothetical "quality of life" improvements made it worthwhile to live in those far-flung areas and drive well over an hour each way to a job.
Most folks who do the long drives are doing it for noble reasons - more room for kids to play, better schools, more house per dollar for growing families. I've resisted the temptation to do the same because when gas hits $5 a gallon in the US suddenly there will be a lot of folks who are desperate to ditch their homes in those brand-new exurban subdivisions, not to mention the Expeditions and Hummers sitting in the driveways, and I don't want to be one of them, not that I'd have an Expedition or Hummer in my driveway even if I did have a house in an exurban subdivision.
IMHO an economic system which makes it feasible for someone to own a massive home in a new subdivision and drive 70 miles each way for a middle management position in an office park is insane and I am sure others on this board feel this outrage. In a way we're all paying for it because their choice to use all that gasoline affects us all through global warming. When you add in the cost to US taxpayers to invade Iraq and maintain a far-flung military presence to keep the oil flowing, suddenly $5 gas sounds like a bargain.
My apologies for turning this post into a classic rant ... myself, I'll try not to gloat at all the long-haul commuters when gas prices start marching up.
Joined: May 22, 2004 Posts: 1428 Location: Ottawa, Ontario
Posted: Sun May 15, 2005 1:08 am Post subject:
The price of gas has to go way up to make the cost of the commute prohibitive. Even at 5 dollars a gallon the price of a 150 mile round trip commute is only around 27 dollars per day (27.5MPG). With an office job in the city this will still be affordable. So people who have good jobs will still be able to afford to commute. It will still make sense to some to make that commute, 27 dollars a day translates into over 500 dollars a month on gasoline for the commute. That is about the equivalent of an extra hundred thousand dollars on your mortgage. So to make it economic to move to within easy public transit distances from work you have to find a comparable place close to the city that is less than 100,000 dollars more expensive than the track housing out in the sticks. I am not familiar with the housing market in NYC but that doesn't sound realistic.
5 dollar a gallon gas would have some significant economic effects but I don't think it would change suburban life. People could compensate quite alot simply by buying more fuel efficient cars. I believe Europe already experiences these prices and there are Europeans living in suburbs with long commutes. _________________ Biofuels: The "What else we got to burn?" answer to peak oil.
The price of gas has to go way up to make the cost of the commute prohibitive. Even at 5 dollars a gallon the price of a 150 mile round trip commute is only around 27 dollars per day (27.5MPG). With an office job in the city this will still be affordable. So people who have good jobs will still be able to afford to commute. It will still make sense to some to make that commute, 27 dollars a day translates into over 500 dollars a month on gasoline for the commute. That is about the equivalent of an extra hundred thousand dollars on your mortgage. So to make it economic to move to within easy public transit distances from work you have to find a comparable place close to the city that is less than 100,000 dollars more expensive than the track housing out in the sticks. I am not familiar with the housing market in NYC but that doesn't sound realistic.
5 dollar a gallon gas would have some significant economic effects but I don't think it would change suburban life. People could compensate quite alot simply by buying more fuel efficient cars. I believe Europe already experiences these prices and there are Europeans living in suburbs with long commutes.
Oh god, not another comparison between American commuters and European commuters.... There is no comparison! Period! The two situations are completely different. The European commutes are shorter, their vehicles are more fuel efficient, and they have the option of taking a bus or train if they don't want to drive.
As far as your #'s on money spent on gasoline and mileage...you're kidding, right? The average suburban commuter isn't driving a car with 27 mpg. They're not even driving a car with 20 mpg. They're driving SUV's with about 12mpg. So you can take the estimates you made on how much they'll be spending for gasoline, and more than double them. That's $1,000 extra spent a month on gasoline, and an extra $12,000 spent a year on transportation costs. There is no way in hell the average suburban commuter will be able to keep that up - they simply wont be able to afford it. Something will have to give.
Even if we used your generous numbers, I still don't think it's possible for business as usual to continue. Americans are up to their ears in debt. Credit card debt. School loans. Home equity loans. Forget about bankruptcy, the government has fixed that as a way out of debt for the soon to be droves of unemployed people that were the formerly middle class. The job market has been in sorry shape for the past couple of years. When gasoline is $5 a gallon ($100 a barrel oil), what do you think the job market and the economy will look like then? THEY WONT EVEN HAVE A JOB TO COMMUTE TO. _________________ In individuals, insanity is rare; but in groups, parties, nations, and epochs it is the rule. – Nietzsche
Time makes more converts than reason. – Thomas Paine
History is a set of lies agreed upon. – Napoleon Bonaparte
Joined: Apr 04, 2005 Posts: 473 Location: Seattle, WA
Posted: Sun May 15, 2005 2:14 am Post subject:
I think Kunster is on to something regarding our suburbian society. In the reader's digest version of the reader's digest version of his book the Long Emergency, he states that our economy is now built on the continued expansion of the suburbs. When gas hits $5 a gallon, the suburbs will hit a break wall. Probably before that price, but $5 is a nice number, right? Once it costs $30 to feed your car to drive to your $120/day (gross) job, most people won't be able to afford it. Sure the middle managers can, but most of America makes far less than a middle manager.
Once it becomes exorbantly expensive to commute to work, that's when you'll see the whole society hit the preverbal brick wall.
I think Kunster is on to something regarding our suburbian society. In the reader's digest version of the reader's digest version of his book the Long Emergency, he states that our economy is now built on the continued expansion of the suburbs. When gas hits $5 a gallon, the suburbs will hit a break wall. Probably before that price, but $5 is a nice number, right? Once it costs $30 to feed your car to drive to your $120/day (gross) job, most people won't be able to afford it. Sure the middle managers can, but most of America makes far less than a middle manager.
Once it becomes exorbantly expensive to commute to work, that's when you'll see the whole society hit the preverbal brick wall.
That pretty much sums it up. My personal opinon is $4 a gallon is the price at which we will start to see major problems, and the real conservation/carpooling begin. I remember listening to the Art Bell talk about Peak Oil on coast to coast a month or so ago, and that question was asked. "At what price per gallon would your current lifestyle no longer be possible?" Everyone who answered that question said $4 a gallon. _________________ In individuals, insanity is rare; but in groups, parties, nations, and epochs it is the rule. – Nietzsche
Time makes more converts than reason. – Thomas Paine
History is a set of lies agreed upon. – Napoleon Bonaparte
As far as your #'s on money spent on gasoline and mileage...you're kidding, right? The average suburban commuter isn't driving a car with 27 mpg. They're not even driving a car with 20 mpg. They're driving SUV's with about 12mpg. So you can take the estimates you made on how much they'll be spending for gasoline, and more than double them. That's $1,000 extra spent a month on gasoline, and an extra $12,000 spent a year on transportation costs. There is no way in hell the average suburban commuter will be able to keep that up - they simply wont be able to afford it. Something will have to give.
I still don't understand all the hysteria about this situation. I can think of lots ways of solving the problem off the top of my head: moving nearer to work, negotiating a telecommuting agreement with your employer, buying a scooter, staying at a flop-house near work during the week, car-pooling etc.
You can pocket most/all of $12,000 simply by dealing with some minor inconveniences, but we can't really expect anyone to cope with inconvenience in exchange for a large sum of money. Moving, or talking with your boss about telecommuting, or riding a scooter, is so unthinkable that clearly the only option left is hysteria/suicide.
Grow up! If the economic signals are telling you something, take responsibility for yourself, and act accordingly.
I still don't understand all the hysteria about this situation. I can think of lots ways of solving the problem off the top of my head: moving nearer to work, negotiating a telecommuting agreement with your employer, buying a scooter, staying at a flop-house near work during the week, car-pooling etc.
You can pocket most/all of $12,000 simply by dealing with some minor inconveniences, but we can't really expect anyone to cope with inconvenience in exchange for a large sum of money.
Uh, yeah. I think those things would fall into my "Something will have to give," statement. The bottomline is the current situation is unsustainable, and when gas prices get high things will change. Whether or not people lose their jobs and don't have to commute, telecommute, car pool, or whatever else remains to be seen.
Quote:
Moving, or talking with your boss about telecommuting, or riding a scooter, is so unthinkable that clearly the only option left is hysteria/suicide.
The average American has absolutely no idea what's coming. When the gas prices spike, and people see their American dream turn into a nightmare, do you really think they'll react in a rational and orderly fashion? Are they just going to suck it up and start car pooling or telecommuting with a smile? I think I'll put my money on hysteria, thank you very much.
Quote:
Grow up! If the economic signals are telling you something, take responsibility for yourself, and act accordingly.
If you're referring to me specifically, I don't live in the suburbs. I live in the city, and the all of my transportation is handled via subway or bicycle. I ride 60+ miles a week to and from school on my bike, and going to various other places.
If you're talking about Joe Six pack looking at economic indicators and making changes, you're fooling yourself. When suburbanites go home and watch the nightly news, they're constantly being told, "These gas price spikes are only temporary. The price will go down soon. Don't worry - be happy." They have absolutely no idea what the hell is going on. How do you expect people to respond to a situation they're totally unaware of? By the time they wise up and start to do something about it, the entire herd will be doing it at the same time. Want to buy that nice new fuel efficient Prius? Demand just went way through the roof, price has gone crazy, and the waiting list will probably have doubled from the current six months to a year long.
Move closer to the cities you say? Brilliant idea! Too bad there isn't enough housing in some cities though. Maybe they could invest in some tents and build some nice new tent slums, er, neighborhoods on the outskirts of the cities. Yeah, that'll work. _________________ In individuals, insanity is rare; but in groups, parties, nations, and epochs it is the rule. – Nietzsche
Time makes more converts than reason. – Thomas Paine
History is a set of lies agreed upon. – Napoleon Bonaparte
The one trend I'm seeing in Canada at least is a condo building frenzy.
What we may see is the start of a migration from the "far commute" locales (out of reasonable public transportation reach) to city based condos.
From my observation point this is a positive development for city/near city dwellers (less traffic on city commute highways) as well as create more oil slack.
Impact on the economy ... definitely a negative one with less housing developments, less cars and fuel purchased.
Joined: May 21, 2004 Posts: 198 Location: East Coast USA
Posted: Sun May 15, 2005 7:59 am Post subject:
Good thread. When I saw the title of the thread, I immediately thought of the people commuting into NYC from the Poconos on the I-80 corridor, then when I read jmac's post I saw he used it as one of his examples.
Not only is that commute long, but it consumes a lot more fuel than you would expect because at most times during rush hour, you are forced to sit in bumper to bumper traffic for an hour or more to cross the bridge or tunnel into or out of NYC. Hybrids would save a lot of fuel here because they can use electric power at slow speeds. There are commuter train lines extending out from NYC into the burbs, but they only reach about halfway to the Poconos. I would expect them to be used a lot more as gas gets more expensive. I take a train every day into the city (not NY), and I enjoy it. I can sip my coffee and read a magazine instead of sitting on the freeway.
Telecommuting would also save a lot of fuel, but not everyone can do it. I work at home a few days at month, and I get more done on those days than when I am in the office. There is still a bias against it- a lot of people assume that you're goofing off when you stay home. Hopefully, those attitudes will change. _________________ www.searchingforthetruth.com
The truth that is suppressed by friends is the readiest weapon of the enemy.
- Robert Louis Stevenson
I suppose the Pocono people will still keep schlepping when gas hits $4, managing the situation by purchasing a small car for the commute and saving the SUV for trips to Sam's Club.
JLK, I'm glad the thread made you think of the I-80 morning and evening rituals. What's sad is that even if gas prices double the cost of the schlep, I think plenty of Pocono People will still do it because the 3+ hours in the car is the only time when someone's not bugging them for the latest spreadsheet or to pick up a barrel of milk and a pallet of Hot Pockets at Sam's Club on the way home from picking up Billy at karate practice. It's a sad commentary on the value we place on time in our society, but I know plenty of Pocono People who are happy to make the long drive because it's their only "me" time during the day.
Mass transit is pretty good in most cities in the NE US as long as you are going from suburb to city center. The reality of the situation is that most people are now going from suburb to suburb, and that's the mass transit problem that local and state governments need to tackle before it's too late (if it isn't already too late).
I really think the oil crunch will hit most in car-heavy places like Houston (note the irony), and other "new" Sun Belt cities. Economic studies have shown that people in Sun Belt cities pay less for housing than folks in the NE or SF Bay area, but have a greater % of their budgets taken up by transportation costs (I can't remember the article). It makes sense because if your mortgage is only $800 a month you can afford to spend $300 fueling and maintaining your SUV for the 80 mile round trip to work.
Possible benefits of $4 and $5 per gallon gas prices:
1. Increased public support for mass transit
2. Companies have to invest in the surrounding community. Pocono People in search of better schools for kids won't have as much of a reason to live in far-flung areas.
3. Wal-Mart will get taken down. Ok, maybe not but we can all hope! Their entire business model depends on their trucking fleet crossing the country with cheap imported goods - not a good way to approach the coming decade.
4. Could Congress finally make some real improvements on Amtrak? Or better yet, break it up into regional railroads? The reason the trains run on time in Germany is because they're operating on a more manageable scale. A regional US railroad from Boston to DC could work.
5. Domestic manufacturing will come back. When the cost of importing shoes (and everything else) from China is too high, look for the jobs to reappear.
I've always been amazed by the public transit system in Europe. I made it from Frankfurt Airport to a small town by public transit, only needing a taxi at the very end of the trip. It is entirely possible to have that here if we demand it.
My opinion is the expense in gas incurred by long-range commuters is nothing compared to the expense in time incurred. People are commuting 3 hours a day. That's 3 hours sacrificed where they could be working for pay, spending time with their family or going to roller-disco or whatever. There lies the difference between Americans and Europeans. The average European commute is something like 20 minutes. This is the result of choices made by commuters, not fuel costs. Americans made the choice of sacrificing their time to live farther and farther away from their work. Why? I'm not sure. It's possible they're just mad out of their minds. But rising fuel costs aren't going to destroy suburbia so much as it will make it an increasingly nasty place to live, but living a nasty life hasn't stopped anyone from commuting for hours.
Joined: May 22, 2004 Posts: 1428 Location: Ottawa, Ontario
Posted: Sun May 15, 2005 1:12 pm Post subject:
some_guy282 wrote:
As far as your #'s on money spent on gasoline and mileage...you're kidding, right? The average suburban commuter isn't driving a car with 27 mpg. They're not even driving a car with 20 mpg. They're driving SUV's with about 12mpg.
Well 27MPG was is the CAFE standard for cars. You're assuming that everybody is taking their SUV to work every day? In my estimation that isn't likely. Maybe since I live in Canada I don't have the American mind set, but around here people often live in a two (or three) car family with one big car or SUV and one smaller car. The smaller car would be primarily the commuting car and the bigger car while also used for city driving is justified because of intercity road trips and trips to Costco, HomeDepot etc.
But really I don't think the suburbarn dream has died if you can keep it alive by simply buying a more fuel efficient car. That isn't a fundamental shift in lifestyle. You'd still have the bumper to bumper traffic and the horrendous commute times. I do think that more radical solutions such as public transit or telecommute are fundamental changes in lifestyle, but those won't be forced on people by a doubling in the cost of fuel if they can easily double the fuel efficiency of their commuting car. _________________ Biofuels: The "What else we got to burn?" answer to peak oil.
lol ..... the American mindset is one massive SUV and another SUV that's not quite as massive! I know a couple who have a GMC Yukon Denali, a GMC Envoy, and an old Ford Explorer in the garage.
I don't think the oil crunch will suddenly turn exurbs into Mad Max areas, but it will slow development and focus development back towards brownfields in America's cities.
And I still can't beileve the thought process involved in choosing to spend 3+ hours a day in the car .... my time is more valuable than that.
lol ..... the American mindset is one massive SUV and another SUV that's not quite as massive!
Couldn't have said it better myself. All Americans may not be driving 12mpg SUV's, but they're certainly not driving 27mpg cars either. I think somewhere between 15-20mpg might be a good average when you look at both the SUV and small car drivers. In America SUV's are huge though. Only recently have their sales numbers started to decline slightly because of high gas prices, but even still, they account for the majority of new car sales for the past years. _________________ In individuals, insanity is rare; but in groups, parties, nations, and epochs it is the rule. – Nietzsche
Time makes more converts than reason. – Thomas Paine
History is a set of lies agreed upon. – Napoleon Bonaparte
I do think we're heading for a brick wall, though when we'll hit it is anyone's guess. I expect next year we'll start feeling some pain. Higher gas prices. The bankruptcy bill kicking in. Credit card minimum payments doubling.
Some of the "solutions" that seem obvious now won't be practical when we actually have to use them - because everyone will be trying to do the same thing. There's cheap city housing available now...but when everyone's trying to move closer to the city, there won't be. You can sell your house in the suburbs now for a huge profit - but when everyone's trying to do the same thing, you'll lose your shirt. You can easily sell your SUV and get a Corolla now, but when everyone's trying to do it, Corollas may end up worth more than Expeditions. High oil prices will cause recession eventually. Rather than letting you telecommute, the boss may welcome an excuse to fire you. Etc. The problem isn't what happens to one person. It's the cumulative effect on society.
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