Wednesday, August 31, 2005

Fuel Costs on the Rise as Connecticut Families Earn Less

Hurricane's Effects Beginning to be Felt Nationwide

It's difficult to concentrate on Connecticut politics when there is so much human suffering happening down on the Gulf Coast. Aldon Hynes has posted on what we can do to help now, including donating money, blood or time to the Red Cross.

But Katrina's effects will be felt all over the country, even here, for a very long time to come. Already the hurricane's impact on the oil industry has forced prices higher, and it's very likely that continued instability in Iraq and the near-complete shutdown of operations in the New Orleans region will drive them higher yet.

Hurricane Katrina’s thrashing of the Gulf Coast made a bad situation worse, shutting down 95 percent of oil production in the region and sending the price of crude oil up $2.61 a barrel to close at a record $69.81 Tuesday.

Meanwhile, the price of heating oil rose 16.7 cents a gallon, hitting $2.08, and gasoline prices again hovered at record levels nationally and broke another record in the New Haven area, hitting $2.60 a gallon for regular unleaded, according to AAA. (Troise)

This comes at a time when household incomes are shrinking and poverty in Connecticut is slowly on the rise.

Two reports released yesterday by the U.S. Census Bureau show Connecticut's average median household income decreased by $344 to $55,916 for the two-year period of 2003 and 2004, from $56,260 for 2002 and 2003 Meanwhile, the state's poverty rate rose from 8.2 to 9.1 percent between those two time periods, while the number of uninsured residents increased from 10.5 to 11 percent. (Jaksic)

The article is quick to point out that the poverty level for the country is 12.6%, and that Connecticut is well below that. However, that number is a bit misleading. The census calculates sets the poverty line at $19,157/yr. earned for a family of four. In Connecticut, however, both wages and cost of living are somewhat higher than the national average, which suggests that a family of four making $25,000/yr. is still in significant trouble.

The fact that household income is declining while the number of uninsured is rising is very troubling in the face of higher gasoline and heating oil costs. Consider this:

The average household will spend between $2,000 and $2,500 more this year on home heating oil and gasoline than in 2000, [economist Donald] Klepper-Smith said. (Troise)

When Connecticut's stagnant economic and job creation numbers are figured in, the situation becomes much worse. The governor has formed a panel of economists to study the issue and make recommendations for the upcoming winter:

The group came up with several options, including expanding winter heating assistance for low-income households, creating a low-interest loan pool to help small businesses and municipalities with energy costs, and increasing bulk purchases of gasoline and heating oil for state vehicles and buildings. (Troise)

The people of Louisiana and Mississippi are feeling the worst effects of the hurricane right now. However, the after-effects of what is starting to look like a national disaster will impact all of us this fall, this winter, and beyond.

Sources
Jaksic, Vesna. "State residents earning less, data show Number of poor, uninsured on the rise." Stamford Advocate 31 August, 2005.

Troise, Damian J. " Rell convenes panel on oil costs." New Haven Register 31 August, 2005.

3 comments:

stomv said...

Hopefully CT can move quickly and help the poorest
* better insulate their attic
* fix broken windows
* upgrade door sweeps
* use insulation foam to fix holes
* use plastic sheets over windows
* insulate hot water heater and lower temp to 120 degrees
* insulate hot water pipes

etc. In fact, if everybody in CT did this, it would help relieve some pressure on heating oil demand -- helping to keep prices a smidge lower.

While you're at it, consider making an extra effort over the next month to:
* telecommute
* turn off lights, TV, etc
* carpool
* reduce A/C consumption
* ride a bike for short trips
* drive your most fuel-efficient vehicle whenever possible


tUSA generates about 42% of the oil it consumes, and LA was generating about 25% of that -- so we could see short-term supplies cut by about 10%. If each of us works a bit to lower our consumption over the next month (and more!), we can reduce the impact of the reduced supply by reducing our demand.

So, do your part. Use less energy today, tomorrow, and every day for the next month. Every little bit helps you, as well as others around you.

Genghis Conn said...

stomv,

This is all excellent information. These are good tips to follow.

MikeCT said...

The article is quick to point out that the poverty level for the country is 12.6%, and that Connecticut is well below that. However, that number is a bit misleading. The census calculates sets the poverty line at $19,157/yr. earned for a family of four. In Connecticut, however, both wages and cost of living are somewhat higher than the national average, which suggests that a family of four making $25,000/yr. is still in significant trouble.

Yes. As pointed out in the CT Post, the federal poverty measure is a poor and outdated measure of financial self-sufficiency. Using the CT self-sufficiency standard, a measure developed by the state to assess what it really costs to live here, one in four Connecticut children live in families that struggle to meet their basic needs.

At the same time, Congress is considering drastic cuts to programs such as Medicaid and Food Stamps – cuts that would make more people poor and uninsured and compound state budget deficits, as this news release points out. They are making the cuts in order to help pay for tax breaks for the super-rich.

If you want to prevent these numbers from getting worse, it's time to call on your Senator and Congressional Rep to oppose these federal cuts. Tell them not to repeal the tax on huge estates and to preserve programs that help low-income people and the uninsured.