As a means of conserving oil, Sen. Hillary Clinton wants Uncle Sam again to mandate a maximum speed limit of 55 MPH. Presumably she’s aware that lowering the speed limit will cause us to spend more time on the roads and less time at our destinations.
But on her website, Sen. Clinton expresses concern that Americans are strapped for time: "Today’s families are often stretched thin – working to make ends meet while also trying to carve out time to care for their young children and aging relatives."
Assuming consistency across her various policy positions, we can conclude that Sen. Clinton is confident that the value of the time that a 55 MPH speed limit will force us to waste on the roads is worth less to us than oil we’ll save by driving more slowly.
Let’s explore. Assume that the typical car on the road today gets 25 miles per gallon on the highway and that a gallon of gasoline costs $3.00. Further assume (rather generously) that driving more slowly will increase the typical car’s fuel efficiency from 25 mpg to 35 mpg.
On highways where the speed limit currently is 75 MPH, reducing the speed limit to 55 MPH will cause a driver to cover 20 fewer miles in one hour of driving. To travel these 20 miles at 55 MPH will take 21.82 minutes. That is, the distance a driver covers in one hour driving at 75 MPH requires 81.82 minutes to cover while driving at 55 MPH.
At today’s average hourly wage rate for non-supervisory workers of just over $16 — but let’s call it an even $16 — this 21.82 minutes is worth $5.82. (That is, working at a wage rate of $16 per hour, a worker will earn $5.82 in 21.82 minutes of work.)
But how much does the driver save, fuel-cost-wise, by driving more slowly?
Driving at 75 MPH (and getting 25 mpg) costs the driver $9 of gasoline per 75-miles driven. (Remember that gasoline is priced at $3 per gallon.) Driving at 55 MPH (and getting 35 mpg) costs the driver $6.42 of gasoline per 75-miles driven.
In short, for every 75-miles covered on a highway, reducing the speed limit from 75 MPH to 55 MPH will save a driver $2.58 in fuel cost — and this assuming that the increase in fuel efficiency of the average car caused by the lower speed limit is a whopping 10 mpg. But the resulting greater time on the road will cost a driver earning the average non-supervisory wage $5.82 worth of his or her time per 75-miles driven.
The net cost to the average worker driving the average car will, under the above reasonable assumptions, be about $3.24 per 75-miles driven. Not a good deal, Sen. Clinton.
Here’s a challenge for a clever student: assume (as is reasonable) that an enforced speed limit of 55 MPH will cause the price of gasoline at the pump to fall. By how much would it have to fall (under the above assumptions) in order to make the $$$ saved on gasoline exceed the $$$ value of the extra time spent driving?