For many years I worked at as a hotel auditor about nine miles from home. It isn't the worlds greatest job, but it pays the bills. I was offered a construction job that paid $2.50 an hour more than the hotel did, but entailed a fifty mile commute each way. I did what most Americans did, I drove further for more money, ignoring the math of the situation.
The true cost of long commutes
Bob makes $20 per hour, commutes 75 miles (1 hour each way, because Bob speeds), to work, works 40 hours per week, and pays 35 percent of his income in taxes.
Bob's pre-tax earnings are $800 per week. $20 per hour.
It takes Bob 50 hours to earn that $800, which of course includes his commute.
Bob's post tax earnings are $520 per week. $10.40 an hour (for his 50 hour week).
Bob drives 750 miles per week for his commute, he gets 25 miles per gallon, and pays $2.50 per gallon for his fuel. Bob pays $75 a week for gas. $520 minus $75 equals $445. Bob makes $8.90 an hour.
But just hold on a minute! The true cost of driving isn't really even fuel. Cars cost money, maintenance costs money, repair costs money. Driving massive mileage eats up cars and is expensive. The most conservative estimates I could find for non-fuel vehicle costs was 15 cents per mile*. That can easily quadruple depending on what you like to drive. Most people will spend more like 30 cents per mile or more. While our friends who lease brand new BMWs every two years are paying as much as $1 per mile in non-fuel costs.
Bob spends $112 a week on cars, maintenance, repairs, insurance, and other non-fuel costs.
Bob ends up with $333 a week. Bob's true salary is $6.66 an hour.
Ok, now that you understand the math I can run a milder example, and a more extreme example.
Chuck makes $15 an hour, commutes 50 miles (45 minutes each way), works 40 hours per week, and pays 30 percent in taxes, and Chuck has an economy car that gets 32 miles per gallon.
Chuck's pre-tax income is $600 per week. His paycheck is $420 per week. His actual income after taxes and vehicle expenses is $306. It takes him 47.5 hours to earn it, and his true wage is $6.44 an hour.
Peter is a big earner, he makes $30 an hour, commutes 90 miles to work in an SUV (hour and a half), works 40 hours per week, and pays 40 percent of his income in taxes. His SUV gets 16 miles per gallon. Peter's more expensive SUV will use an ownership cost of 20 cents per mile, rather than the 15 cents we used for other vehicles. He spent $40,000 on the thing and even if it never needs any repair or maintenance then the purchase price alone adds up to 20 cents per mile over a 200,000 mile lifetime.
Peter's pre-tax income is $1200 per week. His paycheck is $720 per week. His actual income after taxes and vehicle expenses is $400. It takes him 55 hours to earn it, and his true wage is $7.20 an hour.
Notice something, in every case all of these people are reducing their big salaries to almost nothing with these long commutes. They have the appearance of success and wealth, but without the actual success or the actual wealth. These long commutes seem to be most common in high value areas such as California, but there are people doing them everywhere. Most of them never even looked at it long enough to do the math.
*My original source for the fifteen cent per mile average was a magazine article, and that was for older used cars. Newer cars will go over this number every time. Purchase prices, taxes and insurance hit the 15 cent per mile total on even economy cars.