Monday, November 14, 2005
Consider This for November 14, 2005—Excessive Profits
Last week the United States Senate held hearings on the excessive profits made by the oil companies in the last quarter. While we were all paying over $3.00 a gallon for gasoline, the oil companies had the best profits ever recorded. The Senate is trying to make sense of all this.
The oil companies claim that their profit is only seven cents on the dollar. Seven percent profit on their investment. Sounds reasonable.
My question is, Does it look reasonable when the dial on the gas pump starts to register close to $100 for a tank of gas for my wife’s van?
Last Tuesday I bought regular unleaded at the Loaf and Jug in Golden for $2.25 a gallon. Driving into Frisco an hour later, the signs at the gas stations announced that their price was $2.75 a gallon. Looks like about a 25 percent a gallon difference between Golden and Frisco.
A tad more than seven cents on a dollar, and that is just the price differential between stations. It was not the actual profit in the gallon of gas that we all buy.
Sounds like excessive profits to me. Maybe not to the head of the oil company who was testifying before the Senate, but it does to the consumer at the pump.
So where is the disconnect? Why can’t you and I get a straight answer to the obvious question?
As I have mentioned before, for some of us it is merely a matter of shifting our resources, and life goes on albeit more expensively.
For others it is not quite so simple. People who are making minimum wage or on a fixed income do not have the luxury of merely doing some cost shifting. It might be a matter of buying groceries or gas.
I hear the same tale of woe all the time about the cost of prescription drugs.
I take a daily dose of Lipitor to control my cholesterol level. Under my former health benefit plan I was paying about $30 a month, about $1 a pill. Recently I bought my refill, and it came to over $100 a month or $3.33 a pill. That is a 300 percent increase in the cost of my drugs.
Did my salary increase by 300 percent? Hardly. In fact, my salary keeps going down. Each time I get a better job I lose income. Something about being an elected official and getting involved in serving the public. It does not pay well.
I do not feel as though I have a choice. I have to buy my medicine, and I have to buy gasoline. Both regardless of the cost of each.
And I am not making minimum wage.
I often think about the snowplow operator in Ignacio who is on the same state medical plan and pays as much or even more for gasoline. It is likely that he or she also has young children. That can be a major drain on your income. Just what in the world does he or she do when the cost of gasoline and the cost of medicine exceed the amount available to pay for such things?
My heart goes out to everyone in that situation, and as a public servant I think we should be able to do something about these problems.
It seems as though the rich just keep getting richer and the poor just keep getting poorer.
I have mentioned before how my father raised our family on less than $60 a month back in Iowa in the 1940s and 1950s. I won’t bore you with how little everything cost in those days, but I will assure you that buying a tank of gas for our car back then at 15 cents a gallon was as great a burden.
The minimum wage then was $1.25 an hour. I remember it specifically because that is what I was paid to do my jobs in my community at the time. Before taxes that was $50 a week. Not much less than my father was making.
Today I think the minimum wage is around $5.35 an hour. That is $214 a week before taxes. I think that is about four times what I was making 50 years ago. If gas had kept pace, it would be about 60 cents a gallon. Does not equate, does it?
I am sure that the executives from the oil companies will take all that into consideration the next time they decide to declare their profits. I am sure that their newfound wealth will be found on the dinner table of everyone making minimum wage