Proof: Higher Gas Prices Cause Businesses to Close

A popular running line in this years presidential race is gas was $1.85 four years ago and is now $4.00. Various people have challenged this statement and I thought somewhere I would find a chart of monthly gas prices. But, I have one better. A photo I took in December of 2008 when I paid $1.67 for gas.

Gas price, December of 2008 in Omaha Nebraska

I specifically remember this because the price had gone below $2.00 and I wanted to capture it for posterity. My daughter and her friend also teased me about taking the photo, which wasn’t unusual. We were heading to the theater to see the Twilight movie and they had more important things on their mind.

President Obama’s statement stating low gas prices are a sign of a recession is absurd. I can say around here high gas prices are the cause of a recession and the loss of jobs and the closing of small businesses. How can this be? Easy. When gas prices increase the family budget shifts and non essential items such as entertainment is decreased or even eliminated.

In our rural area a thriving tumbling/gymnastics gym was forced to close due to the decrease in students. For more than fifteen years the average enrollment was over 100 students. My kids tumbled when they were little, up until 4th or 5th grade, the cost was $90 a month.

Platte Valley Tumbling, May 2002

It was big news when Amy decided to close. Enrollment had dropped to less than 40 students, she could no longer maintain class size nor afford to remain open. So many people remember bringing their kids, sitting on the bleachers watching their children exercise, develop physically, learn coordination, gain strength, all while having a good time. Family fuel costs per month were increasing over $100 per month and there wasn’t an extra $100 coming in to cover the costs.

How many other small business and entrepreneurs such as Platte Valley Tumbling have closed due to high gas prices? It’s a hidden number and another victim.

During the 2012 Presidential debate, when the “gas price and recession” comparison was made, prices were hovering around $3.89 in Nebraska and over $4.00 on the coasts. I did a little calculating. Based on filling up the tank once a week, driving to work it cost me the following:

$345 more per month ($3.87 vs $1.67)
$254.45 more per month ($3.29 vs $1.67)

The question I ask, am I making more per month? No. So where in my budget is this money? It’s being taken from entertainment and dining. We no longer go to the movies on a regular basis and even eating out at McDonalds was eliminated. Grocery shopping became a challenge and a common topic still remains where are the sales on meat?

Just driving six miles between the Elmwood and Murdock schools became a topic of daily conversation. We used to think nothing of making 3-4 trips a day, morning, after school, practice runs for sports. That changed quickly when the cost became $2.00/trip, parents started car pooling, waiting the hour and a half for students to finish. This change is not necessarily a bad thing we adapted and students also changed their driving habits. My sons carpooled and got rides when they could, they were broke most of the time and didn’t have gas money.

However my daughter works a part time job and has no choice, she has to drive and just the miles to school (6 miles) and work (4 miles from school) costs her $100/month. She is learning a hard lesson in reality. The value in having a part time job is enormous and you can’t take that away, but I can’t afford to pay for her gas either due to my gas costs are taking an enormous chunk out of the budget.

So tell me again how low gas prices are a result of a recession?

This subject is huge in scope, I could go on how we should be using North American fuels, using the technology to tap into the oil reserves we have capped all over this country. But then this article would never end. I just know how it’s affected my family and my friends. We talk about it all the time.

How has gas prices affected you? What effects have you seen on businesses in your area due to high gas prices?