Fort Worth, TX (WiredPRNews.com)—Record high gasoline prices earlier this summer, which have hurt the ability of businesses to make a profit, pushed the national average unemployment rate up in August.
According to September 4, 2008 Associated Press article by Jeannine Aversa that appeared in Yahoo News.com, the nation’s unemployment rate rose from 5.7% in July to 6.1% in August. Aversa’s article cited Labor Department data released on Friday.
Since gasoline is essential for the delivery of almost all raw and finished goods, the high prices at the pump have forced businesses to slash expenses. Aversa’s article listed job cuts in manufacturing, retail, hospitality and professional services as part of the increase in unemployment. Increased restrictions on credit, in light of the subprime housing crisis, also contributed to the increase in unemployment.
In July, President Bush rescinded the executive office’s portion of the outer continental shelf drilling ban and oil future prices dropped from near $150 a barrel to under $110 in one month.The congressional portion of the ban, which expires on October 1 of this year unless the Democrat-controlled congress votes to renew it, can further reduce oil prices.
This artificial supply restriction, along with the ban on drilling in a small portion of the Alaska National Wildlife Refuge, has helped push gasoline prices to all-time highs. Speaker of the House Nancy Pelosi has stated that she is against domestic oil drilling, which would increase supply and lower prices at the pump. Presidential candidate Barack Obama has also voiced consistent opposition to domestic drilling while John McCain favors offshore drilling.
Another factor that makes gasoline prices artificially high is the fact that US has not been able to build a new oil refinery in 30 years because of lawsuits and bureaucratic red tape. This limits the refining capacity even when oil supplies increase. The nearly 50-cent-a-gallon taxes and various gasoline blend requirements also make the price of gas artificially high.