By Global Macro Monitor
Another awesome piece of work from our friends over at The Chart Store. The chart below is a times series of the numbers of hours of work — based on the average hourly wage — needed to buy a barrel of crude oil. Given the current wage of $19.53 in October it now takes 4.7 hours of work to purchase a barrel of crude. Add another couple of hours when Iran heats up.
The chart does illustrate how real wages whip around with the price of crude oil. As a rule of thumb one barrel of crude (42 gallons) produces around 20 gallons or about one tank of gasoline. So what took 2 hours of work to fill the tank 10 years ago now takes about 5 hours. Of course this is a simplification as other byproducts are produced from a barrel of crude, but it is does illustrate the point.
We’ll post more of the The Chart Store’s excellent work throughout this week.