Thursday, November 01, 2007

$6.26 for a Gallon of Gas: Poor France

Can you imagine? Seeing $6.26 on those ubiquitous gasoline signs? (Or I guess it would be $6.2699.)

That means I'd have to spend $125 just to fill up my tank.

price of gasoline vs price of coke
[Thanks to for the image.]

And in France, just to give you an idea of what we're talking about, the minimum wage is 1,280 euros ($1,856) a month, or 15,360 euros ($22,272) a year. And remember, something like 70% of the $6.26 goes to the French government in the form of taxes.

This price (1.14 euros a liter) is a record for France, although one should keep in mind that inflation has distorted our comparison to past prices, meaning that if you were to adjust this price for the lost value of the currency, 1.14 euros may no longer be a record. Still, it's a lot of money for those poor people earning $1,856 a month gross.

As an aside, the French minimum wage comes to about $1,458 a month net of taxes. Yes, that's almost $400 out of their pocket for taxes. And don't forget, the employer pays just as much again (see my next post, where I correct this figure; in fact, I underestimated the employer's part), making the total $800, or 35% (revised upward) of the total amount the employer sets aside to pay this one person. And that's before deduction of any personal income taxes.

Between the elevated payroll taxes and the 70% gas tax, plus the 19.6% TVA sales tax on everything French people buy, no wonder their standard of living is lower than ours--oh yeah, I forgot. They're paying for that wonderful nationalized health care.

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Anonymous Ami said...

In addition to better health care, France also has a pretty good transit system. So people earning minimum wage generally don't need to pay for cars.

That saves them the expense of the gas, the insurance, and of course the car itself. It also gives you some extra time to read the paper while you go to and from work on the metro or train.

2:03 AM  

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