Salary.com Reports That American Workers Are Pumping Entire 2005 Pay Increases Down the Gas Tank

NEEDHAM, Mass.--(BUSINESS WIRE)--Oct. 12, 2005--

  Minimum-wage Employees and Employees in Upstate New York hardest hit; may spend up to 10 percent of annual salary for gas to commute to and from work  

“a more effective approach would be to focus on your individual contributions. Proving that you are worth more in the marketplace is the best argument for a raise.”



Salary.com, the compensation experts, released a new report that calculates the financial impact of soaring gas prices on the majority of U.S. workers' cost to commute, based on annual salary. According to Salary.com, the average worker today pumps 3.3 percent, or $1,341, of their annual salary into their gas tank, an increase of nearly 50 percent from October 2004, when gas averaged $1.91 per gallon. In effect, the average U.S. worker's 2005 pay raise of 3.7 percent (reported by Salary.com in a February 22, 2005 press release) is nearly wiped out, leaving only a few dollars left over. Furthermore, if gas prices hit the formerly unthinkable $5.00 a gallon sometime in the near future, U.S. workers will be spending nearly 6 percent of their annual salary on gas needed to commute.

At the current gas price level ($2.81) and average fuel economy of 17.8 miles/gallon, average American workers, who earn the national average salary of $40,409, spend 3.3 percent of their paychecks ($1,341 per year) on gas needed to commute to and from work. "And that's the average worker," says Bill Coleman, Senior VP of Compensation at Salary.com.

"The reality is that while every commuter is experiencing a financial hardship with increases in gas prices, those individuals earning the minimum wage of $5.15 per hour are being the hardest hit, with a whopping 11.3 percent of their salary being pumped into their gas tank annually," according to Coleman.

    National Average Gas         Commute Cost     Effective Gas Price
         Price/Gallon              (annually)          Salary Cut
                                                   (avg. worker/year)
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           $2.81 (current price)     $1,341                3.3%
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           $3.00                     $1,430                3.5%
----------------------------------------------------------------------
           $4.00                     $1,907                4.7%
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           $5.00                     $2,384                5.9%
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 Source: Salary.com October 2005

Nationally, commuters in Brownsville, Texas are the hardest hit by rising gas prices, pumping 4.6 percent of their annual salaries down their gas tanks. Number two is Rochester, New York at 4.5 percent, while tied for third at 4.4 percent are Honolulu, Hawaii and Riverside, California. Rounding out the top five is Albany, New York at 4.3 percent. For the full list of the most expensive metro areas for commuters, as well as other results from Salary.com's study on gas prices and salary, log onto http://press.salary.com.

         City              Gas Price Salary Cut   Gas Price Salary Cut
                            at Current Price       at $5.00 per Gallon
                             (avg.worker/year)      (avg. worker/year)
----------------------------------------------------------------------
  1. Brownsville, TX                4.6%                   8.7%
----------------------------------------------------------------------
  2. Rochester, NY                  4.5%                   7.5%
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  3. Honolulu, HI                   4.4%                   6.5%
----------------------------------------------------------------------
  4. Riverside, CA                  4.4%                   7.3%
----------------------------------------------------------------------
  5. Albany, NY                     4.3%                   7.2%
----------------------------------------------------------------------
  6. New York, NY                   4.1%                   6.9%
----------------------------------------------------------------------
  7. Springfield, MA                4.1%                   7.0%
----------------------------------------------------------------------
  8. Orlando, FL                    4.1%                   7.4%
----------------------------------------------------------------------
  9. Richmond, CA                   4.1%                   7.4%
----------------------------------------------------------------------
 10. Pensacola, FL                  4.0%                   7.3%
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Source: Salary.com 
October 2005
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How Can Workers Cope?

Chances are that your Human Resource department is not going to give you a raise to cover your rising commuting costs. And not all American workers have a company car. So is there anything you can do, aside from taking the train, riding your bike, or putting your name on the list to buy a hybrid vehicle?

According to Bill Coleman, senior vice president of compensation at Salary.com, "Human Resource managers definitely empathize with their employees when they are forced to use parts of their total rewards package, like their annual merit increase, to cover things like rises in commuting costs."

However, your employer is unlikely to be able to increase every employee's compensation to cover the cost of gas. Coleman notes, "a more effective approach would be to focus on your individual contributions. Proving that you are worth more in the marketplace is the best argument for a raise."

One way to assess your current earning potential is Salary.com's premium service called The Personal Salary report at http://psr.salary.com. The Personal Salary Report will help you determine your value, based on job title, industry, geography, company size, education, experience and other personal factors. Now may be the best time to try to secure a raise to perhaps cover those extra dollars you are spending at the gas tank.

Survey Methodology

To calculate the effective gas price pay cut per metropolitan area, Salary.com used average commute time data from the US Census and the 2004 Urban Mobility Study by the Texas Transportation Institute. Average fuel economy was assumed to be 17.8 miles per gallon, based on the Texas Transportation Institute study. Fuel prices are based on regular grade gasoline as of September 22, 2005, as reported by the American Automobile Association (AAA) Fuel Gauge Report. It is assumed that commuters purchase gas in the city in which they work.

Average salary by metro area was calculated by compensation experts at Salary.com as of October 1, 2005. All salary dollar values are pre-tax and based on a 40-hour work week.

Data is based on a total of 500 commutes per year, to and from work, for 250 work days. Salary.com assumed that employees work 250 days per year and that their travel is equally split between freeway and arterial street travel. The 88 cities used in the study were the sampling of cities analyzed for congestion by the Texas Transportation Institute.

About Salary.com, Inc.

Salary.com is a leading provider of compensation solutions providing data, applications, and services to enterprises, small businesses and individuals. Salary.com's personal tools are used and trusted by millions. Salary.com's enterprise software helps companies manage their compensation expenditures with real-time, decision-ready data and analytical tools. Backed by a team of Certified Compensation Professionals, Salary.com is your partner in compensation.

Contacts

Salary.com Communications
Dan Malachowski, 781-726-7874
press@salary.com
or
Schwartz Communications
Bill Keeler/Amanda Sina, 781-684-0770
salary@schwartz-pr.com

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