The freedom to pump gas
Illinois state representative Camille Lilly recently sponsored a bill to restrict self-service gasoline stations. New Jersey and Oregon already ban self-service gas, although Oregon exempts rural counties. Would creating jobs for gas station attendants be good economics?
There are many tasks we can either do ourselves or pay to have done. Consider food preparation. We can buy and cook food, pay someone to prepare food in our house, purchase cooked food from a restaurant, or consume a meal at a restaurant.
Two factors affect our food preparation choices. First, hiring someone allows the use of specialized knowledge. A chef has likely been to culinary school, while a cook has training and experience. Of course, we probably won’t be hiring Emeril Lagasse to cook for us, and cooking at fast food restaurants does not involve great culinary talent. Still, we can potentially hire skill we do not possess.
Second, having someone cook changes our cost. Cooking for ourselves takes our time, which is valuable. But we must pay someone to cook for us, whether to a restaurant or a chef willing to come to our house.
To succeed in hiring someone, we will want potential workers to find our position desirable. Many people aspire to be chefs and have their own cooking show; many fewer want a career flipping burgers. How much we enjoy cooking ourselves is also relevant.
Similar factors affect the pumping of gas. Although little expertise is involved, carelessness can cause spills and fire risk. According to the National Fire Protection Association, 3,000 vehicle fires at gas stations caused an average one death and $8 million in damage annually between 2004 and 2008. Properly trained and attentive attendants could prevent some of these fires. A 46 percent decline in gas station fires since 1980 demonstrates that self-service has not fueled a crisis.
The price of gas will have to increase to pay attendants, and even more if states pass a $15 per hour minimum wage. Stations will need attendants on duty whenever open, and attendants will often be idle. Gas stations with lots of pumps will need to hire several attendants to use all the pumps simultaneously. Delays waiting for an attendant will increase our time cost of filling up.
We already know how most consumers weigh the inconvenience of pumping gas versus the costs of attendants. Full-service gas stations are not prohibited but almost all have been driven out of business. Drivers preferred the convenience and savings of self-service, even before the advent of pay-at-the-pump technology in the 1980s.
But wouldn’t jobs for attendants boost the economy? Illinois’ Representative Lilly thinks so. Desirability matters when considering creating or bringing back a class of jobs. How many people really want to pump gas all day in the snow and cold of Illinois or the heat of Alabama?
More significantly, labor is a scarce resource. Our economy is more prosperous when we produce goods and services using less labor. Pumping gas involves substituting our unpaid labor for paid attendants. Still, the money drivers save pumping their own gas will be spent on other things, perhaps food at convenience stores. This spending then creates jobs and provides things people value more.
Americans might have changed since the 1970s when self-service conquered the market. Today many Americans would not try changing a tire, preferring to wait on and pay for roadside assistance. Podcaster Adam Corolla has humorously decried this trend. As an economist, I try to avoid judging the choices people make.
If people no longer want to pump their own gas, entrepreneurs can open new full-service gas stations. Or think outside the box and offer fuel-delivery service like the Birmingham startup company FuelFox. Balancing cost and convenience challenges all of us. The freedom to pump our own gas is one part of a prosperity-enhancing balancing.
Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University and host of Econversations on TrojanVision. The opinions expressed in this column are the author’s and do not necessarily reflect the views of Troy University.