Most business leaders are probably tired of dealing with powerful headwinds that are completely out of their control. I am talking about the Covid-19 pandemic, ongoing supply chain constraints, Russia's invasion of Ukraine, and inflation the likes of which we have not seen in 40 years. And above all those concerns is how perilously close the U.S. is from turning from a democracy into a theocratic dictatorship.
Sadly, there is a new and powerful headwind -- record gasoline prices -- that business leaders must help fix. To get a feeling for how much it boils peoples' blood to pay $5 or more a gallon for gasoline, you need only watch this clip in which I appeared June 6 along with Boston area drivers complaining about how much they are paying for gasoline.
Why is this a problem for business leaders? If you require your employees to drive into the office every day -- or even a few days a week -- they are livid about paying so much more for gasoline. And the less you pay them, the more that anger is a reflection of their fear of losing their ability to meet their obligations to their family.
Here are three things that business leaders must do to help their employees cope with rising gasoline prices.
1. Listen to concerns.
Just as business leaders did during the pandemic, they should now check on how people are feeling about gasoline prices. Simply ask them about what was going through their minds the last time they filled up their gas tank.
The answer will probably give you a feeling for their high level of anger and fear about how much more they are paying for gasoline. If your employees are earning incomes over $100,000, they will probably not be making lifestyle changes to be able to keep paying their bills.
However, if you are listening to your average worker, they probably are cutting back on non-essentials so they can keep paying for vital bills such as rent or mortgage, food, utilities, and health care. They may also be looking for you to limit how much their response to rising gasoline prices is degrading their quality of life.
2. Pay monthly gasoline bonuses.
On June 6, I exchanged tweets with Richard Fuisz, who was played by William H. Macy in Hulu's The Dropout, about Elizabeth Holmes and Theranos. I first interviewed Fuisz in October 2015 when the Wall Street Journal wrote its first story questioning Theranos's business practices.
In response to a tweet stream in which I linked to the interview I did regarding gasoline prices, Fuisz tweeted that business leaders need to provide workers a fuel subsidy when gasoline prices are "crazy" -- arguing that it is a "long term smart" thing to do.
I agree with him because a fuel subsidy would make workers less eager to switch jobs for more pay (and/or lower commuting requirements) and free them to focus on working productively.
Business leaders should also do some simple calculations to figure out how much the increase in gasoline prices is squeezing employees' family budgets. For example, in May 2020, the average price of gasoline was $1.96 -- since then the price has increased 132 percent to $4.55, according to the Energy Information Administration.
For an employee who fills up their 20-gallon gas tank twice a week, that adds over $100 more a week -- from $78.40 to $182 -- to their weekly gasoline bill.
Let's say you pay your average worker $50,000 a year. At a 22 percent tax rate, that means your average worker pulls in $3,250 a month after taxes. In the past two years -- assuming that the employee refills their tank eight times a month -- gasoline has gone from taking 10 percent to 22 percent of their monthly pay.
I think workers would appreciate if business leaders put them in the position they were in back in May 2020 by paying them a fuel subsidy of $100 a week. Were the price of gasoline to keep rising, you would increase the subsidy. If gasoline drops to where it was in May 2020, the subsidy would go away.
3. Lighten up on any requirement to appear in the office.
If that sounds too costly for your business, you might consider cutting back on how many days you expect workers to appear in the office each week. For example, you might find a way for workers to cut back the amount of gasoline they use up by 50 percent a week.
Record gasoline prices are a big problem for your people. Business leaders can ease that pain by doing these three things.