Back in the 1930s and 1940s, the Chief of the Bureau of Public Roads Thomas Harris MacDonald imagined a nationwide network of toll-free highways. His vision was largely implemented: Today only 1 out of every 16 miles on the Interstate system is toll road. All of these freeways has helped (ahem) fuel urban sprawl resulting in more cars per person, more miles driven, and arguably, increased American tubbiness.

Statasico would love to remedy this by raising the gas tax. Among other things, ncreasing the gas tax would:

1) Capture the negative externalities caused by greenhouse gas emissions and traffic

2) Create a potential pool of money for mass transit projects

3) Really upset the oil companies, and

4) Never happen with gas prices hovering around $3 per gallon.

What about mass transit? Isn’t some of that federal 14.7 cent per gallon gas tax applied toward mass transit? Yes… in spirit. Right now a whopping 1% of the price of every gallon of gas (about 2.7 cents of every gallon) goes toward the Mass Transit Account.

So I’m giving in. Let’s build more highways. And make every one of them a tollway. But don’t stop with just the new highways. We should also convert the remaining miles of the Interstate system to toll roads. I’m not advocating that states continue privatizing toll collection. That’s one role the government should not outsource.

One of the common complaints about toll roads was the inefficiency of sitting in a line of cars sputtering greenhouse gasses while someone ahead of you scrambles for change. But E-ZPass has started to change that. Unfortunately, toll collection is still slow because not all cars use the E-ZPass lanes. So the government should require every to have an electronic toll collection (ETC) technology installed as soon as a car is registered.

The government must stay actively involved because tollways are a regressive tax. Fixed tolls take a higher percentage of wages from low income workers than high income workers. Once again, technology can help remedy this. E-ZPass could be linked to a driver’s tax bracket, enabling the government to impose lower tolls for low income workers. Likewise, hybrid cars or alternative fuel cars could pay lower tolls.

Even better toll collection technology already exists across the Atlantic. Last year, Germany introduced an automatic toll system for trucks traveling along its 7500 miles of autobahn. The Toll-Collect system utilizes GPS technology, so Germany can reap about $3.2 billion annually while never requiring trucks to slow down to collect a single toll.

So what is the gas tax equivalent of tolls? Looking around the country, tolls average about $.04 per mile. With average passenger car and light truck fuel economy was 21.8 miles per gallon in 2004, those tolls are the equivalent to a gas tax of $.83 per gallon. Unlike a gas tax, tolls don’t necessarily lead consumers to buy more fuel efficient cars. But tollways make it easy for drivers to see some of the expenses associated with 46,000 miles of “free”ways. And with added toll revenue, perhaps we can beef up that Mass Transit Account and start to get people out of their cars.

*Uses the 2004 average fuel economy for cars and light trucks in the U.S. of 20.8 miles per gallon.

Today the U.S. Interstate Highway system celebrates its 50th birthday. A nationwide network of roads had been envisioned since the at least the 1930s, but it was the Cold War that provided the necessary political impetus for the ambitious network to get off the ground. And on June 29, 1956 Eisenhower signed the Federal-Aid Highway Act.

Initially, the system was intended to cover 40,000 miles of road, including 2,000 miles of existing toll roads. Today there are 46,837 miles in the national highway system, including 261 beltways, ushering millions of commuters from the suburbs and exurbs to work. These miles constitute only 3% of all roadway miles in the U.S. but they transport 8 times more vehicles than all other U.S. roads.

Media stories about the horrors of a crumbling system have marked the today’s anniversary. ABC reported that,

“Traffic jams, which annually cost the nation $200 billion in lost productivity, suggest that repairs and expansion of the system are long overdue.”

I’m not sure that $200 billion of traffic jams suggest that we need to repair and expand the system. It seems like we’ve already created an expansive system and that the results speak for themselves. In the last 50 years, we have increased the number of miles that each person drives annually by 271%, and we have 237 million vehicles on the road, nearly one car for every American of driving age.

I know we can do better. More cars! More roads! More traffic! But you’ll have to tune in tomorrow for the rest of statastico’s story about the future national highway system, including a bizarre twist ending …. But for now, here are some statastics with delicious lime-colored Smart car graphics.

^*Including passenger and commercial vehicles, there are currently an estimated 237,000,000 vehicles in the U.S. today.
^#In 1956, 168,903,031 Americans drove 626 billion miles annually. In 2006, 299,092,260 of us drive approximately 3 trillion miles annually.

“Republicans Cut Minimum Wage by 21%” – or – “Do-Nothing Congress is Something of a Misnomer”

This week, Democrats are threatening to block a bill that would give members of Congress a raise until the minimum wage is increased. While I applaud the Democrats in Congress for re-opening this issue, minimum wage should not be subject to political winds. Since 1938, the annual minimum wage (based on working 40 hours per week, 50 weeks per year) has ranged from $6,807 to $18,621 in 2006 dollars. During that time minimum wage has ebbed and flowed, creating instability and unpredictable incomes for the poorest American workers.

Much of this instability is masked by inflation. Inflation silently eats away at minimum wage when Congress is in a do-nothing sort of mood. In 1981, the Democratic Congress raised the minimum wage from $3.10 to $3.35 where it remained for 8 years. Unfortunately, that same $3.35 in 1981 was only worth $2.46 by 1989. Effectively, inaction on minimum wage cut worker pay by 27% between 1981 and 1989.

Not to be outdone, the Republicans increased minimum wage from $4.75 to $5.15 in 1997, where it has remained ever since. Unfortunately, that same $5.15 in 1997 only buys $4.08 of goods in 2006, a reduction of 21% due to inflation.

The Democrats have proposed raising minimum wage by $.70 per year until 2009 when it would top out at $7.25/hour. This would raise minimum wage by about 15% annually. While this proposal does rescue minimum wage – and Congress – from the ignominy of falling below the poverty level for the first time since 1949, it is a sudden increase for those who employ minimum wage workers.

Inaction (or sudden action) on minimum wage creates wage cost volatility for employers. Jarring increases in the wage costs make it more difficult for businesses to plan.  These infrequent and unpredictable increases in minimum wage can also create a political backlash from small business owners.

The solution is to create an automatic, annual increase of the minimum wage based on either the federal consumer price index, or some fixed percentage over the federally-determined threshold for poverty. Make minimum wage more transparent to employers and the working poor, and let do-nothing Congresses get back to their flag burning amendments.

*Historical Minimum Wage assumes working 40 hours/week, 50 weeks/year and is adjusted by the CPI.

^#U.S. Census Bureau 2005 Poverty Threshold for single person under 65, adjusted upwards by 3% for 2006 estimated inflation.

^6.27.06 - Reuters reported a Democratic proposal in Congress to raise minimum wage by $.70 per year until 2009 when it would top out at $7.25/hour.