Monday, May 01, 2006
Spike in Gas Prices Hurts Low Wage Workers
The price per gallon for gasoline topped $3.00 last month, and forecasts are for costs to level off in the $3 - $3.50 range for the coming year or more.
The rise in costs hurts everyone, but low wage workers such as nannies and housekeepers are hit particularly hard. Americans on average commute 32 miles round trip for work. Assuming the average fuel economy of 22.4 miles per gallon and a $1 rise in gas costs year over year, the average worker will pay an additional $350 this year for commuting. In congested areas such as Washington DC traffic can double commuting times and expense.
The IRS to date has not made any change in the 40.5 cents per mile reimbursement rate for business travel. Many employers require their nanny to transport their charges to/from school, sports practices, and a host of other planned activities. The AAA 2006 Your Driving Costs survey released March 30 2006 estimates that the average cost per mile to operate a motor vehicle is 52.2 cents!
Employers are already reporting difficulties hiring and retaining part time employees. Commuting costs coupled with a favorable employment environment are causing more job seekers to hold out for better paying full time or longer/fewer shifts part time jobs. Nanny bulletin boards are buzzing with complaints about employers failing to reimburse work related travel, or not adjusting their flat rate 'gas allowances' that they offer the nanny.
Everyone is feeling the squeeze. Nanny employers would be wise to rethink their reimbursement schemes in the interest of staff retention.
The News Room at 4nannytaxes.com contains up to date information on allowed employee expense reimbursement levels.
The rise in costs hurts everyone, but low wage workers such as nannies and housekeepers are hit particularly hard. Americans on average commute 32 miles round trip for work. Assuming the average fuel economy of 22.4 miles per gallon and a $1 rise in gas costs year over year, the average worker will pay an additional $350 this year for commuting. In congested areas such as Washington DC traffic can double commuting times and expense.
The IRS to date has not made any change in the 40.5 cents per mile reimbursement rate for business travel. Many employers require their nanny to transport their charges to/from school, sports practices, and a host of other planned activities. The AAA 2006 Your Driving Costs survey released March 30 2006 estimates that the average cost per mile to operate a motor vehicle is 52.2 cents!
Employers are already reporting difficulties hiring and retaining part time employees. Commuting costs coupled with a favorable employment environment are causing more job seekers to hold out for better paying full time or longer/fewer shifts part time jobs. Nanny bulletin boards are buzzing with complaints about employers failing to reimburse work related travel, or not adjusting their flat rate 'gas allowances' that they offer the nanny.
Everyone is feeling the squeeze. Nanny employers would be wise to rethink their reimbursement schemes in the interest of staff retention.
The News Room at 4nannytaxes.com contains up to date information on allowed employee expense reimbursement levels.
