$6 Gas Would Eat Up Nearly 30% of Low-Income Drivers' Paychecks

Henry Hoenig
Updated on Jun 27, 2022 · 5 min read
Americans paid record-high prices for gasoline as the summer driving season got under way over the Memorial Day holiday weekend. Prices could go much higher.
Energy analysts warn that Brent crude oil — the single biggest component of U.S. gas prices — could rise another 30% if sanctions on Russia for its invasion of Ukraine cause a sharp contraction in Russian oil exports. A JPMorgan analyst predicted in late May that the average price of all grades of gasoline could reach $6.20 this summer, a 31% jump from the record $4.73 a gallon seen in the week ending May 30. 
The pain of gas at $6 a gallon would not be distributed equally. Lower- and middle-income drivers pour a far bigger share of their paychecks into their fuel tanks than higher-income drivers — even though the higher earners say they drive up to 50% more miles per year.

Key Insights

  • With gas at $6 a gallon, U.S. households earning less than $40,000 a year would spend 11%-28% of their after-tax income at the pump.
  • The bottom half of all households in the U.S. by earnings would spend an average of 11% of every paycheck on gas at $6 a gallon, while the very lowest earners would spend 28%. Those earning more than $150,000 would pay 2.8%-4.9%. 
  • Rural drivers would take a bigger hit than urban and suburban residents, paying 9.4% of their after-tax income at $6 a gallon, compared to 6.3% for urban drivers.
  • The average U.S. household would spend $4,600 a year on gas at $6 a gallon, while those making more than $150,000 would spend more than $7,000 a year.

Lower-Income Drivers Suffer Most From High Gas Prices

Data show that lower-income households — who are more likely to be Black or Hispanic than their higher-earning counterparts — spent a bigger share of their pay on gas even before the recent price increase.
A family earning $15,000-$30,000 a year — let's call them Family A — spends 9.6% of their take-home pay on gas at $5 a gallon — nearly double the 5.1% someone making $100,000-$150,000 pays, according to data analysis by Jerry. At $6 a gallon, Family A would pay 12% of its after-tax income on gas — compared to 6.1% for the higher-earning family, Family B.
Yet, Family B would spend more than twice as much at the pump — about $450 a month at $5 a gallon — as Family A, which would spend about $180 a month. That's because higher-income drivers rack up many more miles. Those earning $100,000 or more each year report driving up to 20%-50% more miles annually than people who earn $15,000-$50,000.

Drivers in Rural Areas Face Bigger Hit Than Urban Residents

People living in rural areas will suffer more than those living in bigger towns and cities. 
Gas at $6 a gallon would cost rural households 9.4% of their take-home pay, compared to 6.3% for urban residents. More than 90% of rural households are white, and they are generally older and include fewer working adults than their urban and suburban counterparts. Rural residents report driving about 20% more miles each year than their counterparts.
Rural drivers also spend a higher percentage of their pay on vehicle maintenance, insurance and vehicle-finance charges. With gas at $6 a gallon, their total transportation expenses would chew up 20% of their after-tax income. That compares to 15% for urban residents.


While high gas prices hit nearly all Americans, the pain isn't spread evenly. Lower-income households and those living in rural areas feel it the most. Inflation hurts lower-income households more than higher-earning ones, and the price of gas accounts for much of the difference in pain levels, according to a study by the U.S. Federal Reserve.
Gas prices had already begun to weigh on people in March, when they jumped to then-record levels. Thirty-nine percent of consumers said they drove less in March, and more than two thirds of them said they did so because of gas prices, according to Morning Consult, a business intelligence firm. 
Because driving is so essential to daily living for most, Americans can only reduce their driving so much, forcing them to cut back on spending in other areas. That generally means non-essential goods and services like restaurant meals or tickets to sporting events, particularly for higher earners who have more “fat” to trim from their budgets. But lower-income households enjoy less discretionary spending to begin with, so they would likely endure more painful cutbacks if gas prices stay elevated or keep soaring.
To make matters worse, higher oil prices drive up prices on a range of other products, adding to the pain at the pump. This is why oil-price shocks often spark recessions. 


Jerry examined 2019 data on gasoline spending and after-tax incomes from the Bureau of Labor Statistics and 2017 driving-habit data from the Federal Highway Administration. The 2021 spending and income data wasn't available yet so we chose the 2019 data due to Covid-19's impact on driving habits, and therefore spending on gasoline, in 2020.
For comparison, we calculated an average price of $2.69 for gasoline in 2019, based on the average price for all grades in the U.S. Energy Information Administration's weekly price data. This gauge reached $4.73 a gallon the week ending May 30.
Higher numbers of people working remotely in 2022 versus 2019 could have affected the results. But because jobs that can be done remotely tend to pay more than those that can't, it is unlikely the main conclusions would change. (Rural households also earn less, on average, than non-rural households.)
(This is an updated version of a study first published March 28, 2022.)

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