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Saturday, June 15, 2024 | Back issues
Courthouse News Service Courthouse News Service

$1 million gas giveaway in Chicago illustrates economic anxiety nationwide

Cars lined up for blocks to get their share of free gas, as energy prices and the overall cost of living continue to rise across the country.

CHICAGO (CN) — This rainy Thursday morning in Chicago, Moises Cruz woke up well before the sun. He wasn't alone. Across the Windy City and its suburbs, hundreds of cars lined up near gas stations in the predawn hours, waiting to get their share of a $1 million free gas giveaway.

Each car was eligible to receive $50 of gas from one of the 50 gas stations participating in the giveaway, until the money ran out. Funded by wealthy local philanthropist and two-time Chicago mayoral candidate Willie Wilson, it came as a welcome reprieve to area residents struggling with Chicagoland's ever-increasing cost of living.

"It's something nice for people, you know?" Cruz said. "Something nice from a guy of the people."

The giveaway was coordinated between Wilson, City Hall, the Chicago Police Department and local community volunteer groups. Wilson, who identifies politically as an independent, wasn't shy about using the giveaway to hint that he will once again run for mayor in 2023, but the recipients didn't seem to care about his self-promotion.

"Thank you Willie Wilson!" one man shouted at news cameras from his car as he approached the pump at a participating BP station on the city's North Side.

While Wilson's $1 million act of charity - plus a smaller, $200,000 gas giveaway he funded last week - may help people in the moment, it will do little to curb the ever-increasing cost of living in Chicago - including the city's average gas price, which as of Thursday hovered around $4.70 for a gallon of regular.

Even the owner of the North Side BP, who asked to remain anonymous and said Wilson approached him to participate in the giveaway earlier in the week, acknowledged that energy prices were becoming untenable for most people. He said like most gas franchise owners, he had to follow the market to turn a profit on gas sales, but that it still took a toll on his conscience.

"We want to help people. These gas prices are too high," he said.

One driver going by Philip D. laid the blame for the high prices at the feet of the city and state governments, and their reluctance to take on the multibillion dollar oil companies that franchise in the region.

"They should look into the price gouging... [the oil companies] are taking advantage of us," Philip said.

He referred to ExxonMobil, Chevron, Shell, and BP, which saw a combined $174 billion in profits in 2021. On top of that, Chicago Mayor Lori Lightfoot increased the city's per-gallon gas tax from 5 cents to 8 cents in 2021. It was only two weeks ago that Lightfoot said she was considering lowering that tax again, and only this past Wednesday that the Chicago City Council voted to ban fossil fuel investments.

Still, the forces behind gas price increases are global and systemic, beyond any one city or market player's culpability. Most recently, gas prices spiked after President Joe Biden signed an executive order banning the import of Russian fossil fuels - Russia previously provided 8% of all U.S. petroleum imports. Gas prices across the country have also trended upward since 1929, though they remained relatively stable until the 1970s. They then started spiking in periods of upheaval, like during the 1973 Yom Kippur War, the 1979 Iranian Revolution and the U.S. invasion and occupation of Iraq that began in 2003. Prices fell slightly in the mid-2010s, but have now reached an all-time high amid the Russia-Ukraine war.

The cost of living in the U.S. in general has also steadily increased over the course of the last century. According to data from the Bureau of Labor Statistics, what cost a dollar in 1929 would cost $16.59 in 2022, and a 1929 dollar would only be worth about 6 cents today. At the same time, U.S. wages have failed to keep up with this inflation since the early 1970s. The Pew Research Center reported in 2019 that the average hourly wage for U.S. workers, adjusted for inflation, had only increased by about 9% since 1964, and was actually lower than the average wage in 1973.

Roberto Ortiz, a sociology professor at California State University, said there is a link between rising gas prices and the increasing precarity of many Americans' financial situations. It's no coincidence, he said, that gas spikes and wage stagnation both began in the 1970s.

"In advanced, stable capitalist countries, you see need stable, low oil prices… If you see a spike in oil, you see an upward price pressure across the system and, thus, that downward pressure on overall profits," Ortiz said.

Ortiz further explained that unlike in countries where the oil industry is nationalized, privately-owned oil companies tend to exist in conflict with other sectors of the private economy. Without state control, oil spikes in times of crisis sends other industries scrambling to find ways to afford the increased energy costs - often by raising their prices or freezing wages. Companies can also look to cut jobs during these periods of crisis, Ortiz said, as they try to offload labor costs and avoid the financial and social costs of labor movements.

"Moments that have been crises in the economy, have been moments of high profit for the oil industry... the declining rate of profit and increasing crises, is tied to expensive oil," Ortiz said.

Joel Roemer, a professor of political science and economics at Yale University, said inflation over the last several years in particular is also attributable to a number of more granular factors. He cited shifts in purchasing trends among the U.S. population after the 2020 Covid-19 lockdowns, as well as chokepoints in the country's aging transportation and infrastructure systems.

"People were shifting their purchases from services to goods... and that caused inflation," Roemer said. "And there have been tie-ups at the ports where tankers are waiting to be unloaded, and that causes inflation."

For drivers in Chicago on Thursday morning, Wilson's giveaway provided a brief respite from these complex forces beyond their control.

Cruz said he hopes Chicago's city government, with what limited power it has, will take similar steps to help its residents in the future.

"They've got to make a plan," he said. "They've got to get organized... this is too much."

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Categories / Consumers, Economy, Energy

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