Fuel prices drive tough adjustments Public, private sectors eye shorter workweeks, telecommuting to cut costs

Tim Jones

Jul. 7, 2008 (McClatchy-Tribune Regional News delivered by Newstex) -- You know times are tough when the governor of Michigan, the top executive in the state that put the nation on wheels and sold a generation of Americans on the virtues of gas-guzzling trucks and SUVs, is now riding her bike to work.

This symbolic gesture by Democratic Gov. Jennifer Granholm--pedaling a couple of days a week to the state Capitol in Lansing--is part of an evolving behavior shift by individuals, employers and governments struggling to adjust to the hard reality of gas at more than $4 a gallon, as well as higher energy costs overall.

In response to rising gas costs, there's a surge of interest in telecommuting. And starting next month, 17,000 Utah state government employees will go to a four-day workweek. There's even talk in Congress weighing the return of the widely loathed national 55-m.p.h. speed limit.

These are adjustments and not solutions in reaction to gas prices that, in some places, have passed $4.50 a gallon and could hit $5, analysts say. On Saturday, the American Automobile Association said the national average for regular unleaded was a record $4.103 a gallon.

Residents in some rural areas are spending as much as 17 percent of their income--one of every $6--on gasoline. And those who drive long distances to work are slowing down and economizing to absorb gas prices that have jumped an average $1.15 per gallon in the past year.

"You just start counting pennies and dimes," said Don Patton, a counselor at the Southern Illinois University School of Medicine who makes a 120-mile round-trip daily commute from his home in Cairo, at the bottom tip of Illinois, to Carbondale.

Patton fills up his Honda Accord in Missouri, where gas is about 25 to 30 cents cheaper per gallon than in Illinois. While some secretarial staff at SIU are on a four-day workweek to save on gas costs, Patton said that is not an option for him--nor is moving to Carbondale. Patton and his wife are caring for aging parents in Cairo.

Other than slowing down, Patton can do little else.

"I suspect the price of gas is only going to go higher," he said.

States hunker down

With that in mind, Illinois Gov. Rod Blagojevich has directed state employees to reduce out-of-state and "unnecessary" travel, a spokeswoman for his Office of Management and Budget said. Mowing of some state land has been reduced to once a year and employees have been urged to rely more on video conferencing, the department said.

Other states have gone much further. Utah Gov. Jon Huntsman recently ordered a compressed Monday-Thursday workweek for about 70 percent of the state's 24,000 executive branch employees. It would not cover police officers, prison guards, court employees or those who work at Utah's public universities.

The private sector is moving more aggressively toward telecommuting, said Sherri Sirotzky, senior managing consultant at Human Capital Management, a division of IBM. (NYSE:IBM)

"It used to be confined to IT [information technology] companies and financial services. Now you're seeing it everywhere," Sirotzky said. "Environmental issues, the cost of gasoline ... and the lengths of commutes are pushing a lot of companies over the edge."

Telecommuting is not an option for law enforcement. Sheriff Randy Krukow, in Clay County, Iowa, said his office anticipated $3-a-gallon gas when he submitted his budget to the county in December. At the start of the new fiscal year, last week, Krukow was already at least 35 percent over budget for gasoline. His deputies do a lot less cruising, Krukow said.

"We have them stop and park. ... You make your presence known," he said.

"We're not advertising to the bad guys that they've got free rein out there, but when the opportunity presents itself, we shut the car off," Krukow said.

Michigan's state government is expected to unveil plans in about a week to give some of the state's 51,400 employees the option of flexible hours, including four-day weeks. About 2,500 state employees work flexible hours.

"Gas prices are a piece of it," said Elizabeth Boyd, Granholm's press secretary, "but it's also about being an employer of choice and ensuring that we can retain a great workforce."

Distance to work is looming as far more important as the price of gas soars. A survey from the Oil Price Information Service and Wright Express (NYSE:WXS) , companies that collect and analyze fuel purchase data, shows residents in 229 counties, most in the South and West, are spending an average of at least 10 percent of their income on gas. The national average is 5.1 percent, as of June 28, up from 3.8 percent in 2007 and 1.9 percent in 2002, the report said.

Rural areas strained

"When you live in a rural area, you can expect to drive long distances," said Dan Black, a labor economist at the University of Chicago. "You've seen many employment opportunities moving to bigger cities, and [$4-a-gallon gas] is putting a lot of strain on rural areas."

Black recently co-authored a report showing longer commutes in metropolitan areas have discouraged non-Hispanic married white women from entering the workforce. The practical effect of $4-plus gas, Black said, aggravates the cost of commuting.

Jeff Chandler, a sheet metal worker, knows that all too well. Chandler spends almost $400 a month on gasoline to get to his job in Carbondale, 56 miles from his home in rural Marissa. Chandler used to drive a Chevy TrailBlazer, which got about 17 miles per gallon. He traded in his $30,000 SUV after two years, getting $12,500 for it. He now drives a Chevy Cobalt, which gets about 30 m.p.g.

"Now I travel a lot less," Chandler said. "I go out to eat a lot less. And I've definitely slowed down to 55."

Tribune reporter Jeffrey Meitrodt contributed to this report from Springfield.

tmjones@tribune.com

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