This week’s question: “I read in the New York Times on the weekend that workers in some states are spending as much as 20% of their salaries on gas. Is that a realistic number?”

While it’s possible to find some workers who are spending 20% of their wages, it’s not so easy to put a number on that. So it’s unclear to me how the NYT makes this interesting chart.

If we take all workers in America, plus all people between the ages of 65 and 85 (some double counting because there are millions between those ages who are still working), we get 171 million as a reasonable estimate of how many people are on the weekday roads on a daily basis. Divide that by the $415 billion we are spending on gas, and each person is spending roughly $47 a week on gas.

A simple distribution would indicate there are tens of millions who spend $100 or more a week on gas, but for the sake of argument, we’ll use the average of $47.

There are 9.8 million people working in restaurants who earn an average of $230 per week, so they do spend 20% of their wages on gas per week. (Of course they get tips on top of that.)

But there are another 20 million workers who are earning $372 a week (and they don’t get tips), so gas is 12.6% out of their wages. These workers are retail workers, social assistant workers and recreation workers.

And there’s another 13 million who earn $433 a week, so gas is eating away at only 11% of their paychecks. They include other service workers, nursing and residential care workers, building service workers, hotel accommodation workers and those working in the business services industry.

All told, that’s 43 million employees (over 30% of all workers) spending double digits of their gross pay. That’s a huge adjustment.

Of course, many focus on net pay. With 10% minimum Federal tax rate, 7.2% payroll tax, state taxes between 0% and 6% and local taxes between 0% and 4%, you’d have to reduce the gross by over 20%, pushing the gas portion up several percentage points for each of the above examples. It’s safe to say the New York Times didn’t have much trouble finding someone who poured 20% of their pay into a gas tank — they had millions of people to choose from.

Tags: Economy, Fuel, Gas prices, New York Times, Taxes, Wages