I don't disagree about the distance but 20 mile commutes are very common. This is the distance from a small town to the rural areas and is a common commute for someone that lives in a trailer on a rural plot.

I lived a lot of my life poor and was born and raised in a poor state you don't have the sort of cash reserves people are considering. An 10-15 dollars a hour is still consider very good pay in a lot of the country.

As you get off the costs the demographics I posted change quite a bit and you get closer to 50% of the population in the 40k and below income level. No one has even considered that these people have children.

Two dollars a gallon is enough to cause some pain this is why WalMart has already had problems. I've personally had to save for a few months to purchase a cheap dvd player at WalMart thats the type of income level your talking about.

How to explain it.

Their exists a sort of base living standard that people strive for this is:
1.) A reasonable Apartement/House/Trailer.
2.) A decent car if your luck new.
3.) Health care
4.) Clothes School supplies etc for the kids.
5.) Some toys for the kids and electronics for the adults.
6.) Enough money to cover heat/water/electricity etc.

This is not in any real order but what happens is as you earn more money a lot of it goes into a better house and car and more toys. So your disposable income does not increase till your past about the 50k mark. Its only when you cross about 50k these days in income that your actually earning money that can be saved and thus is really disposable and also living a reasonable life.

Higher oil prices have already taken a bite out of consumer spending and we would expect to see even more pain as it increases. Understand a lot of these people now work in retail/sales oriented businesses so they are susceptible to a slowing economy. And understand that many are totally dependent on getting overtime or extra shifts to make ends meet. Overall their income is very susceptible to increasing costs.

Now higher gasoline costs are just part of the price increase and many have noticed we are seeing increased transportation costs for all goods passed down to the consumer so your not just dealing with direct costs but also indirect costs such as higher food prices. When your talking about people that are happy when they have 150 dollars left over at the end of the month the price point at which they pull back significantly from purchasing luxury items has already in the past.

Also consider we are seeing the dollar fall in value leading eventually to higher costs for cheap imports.

Some of these people did get involved in the housing bubble but in general most don't own their own homes or if they do the got them through government loans that have stricter standards the economic slowdown from this group is pretty much purely related to increased costs and despite the government stats we are seeing signs of a slowdown in spending in the lower tier income levels. Also of course construction and other housing related business is a big employer in this income range.

Remember we are in a growth based economy. High oil prices need only cause a retraction or stagnation in the economy to start a cycle of job loss/lowering incomes. The reality is that if these people start losing regualar overtime second shift work they are toast. This process has already started higher oil prices will only serve to aggravate the situation. The crazy housing boom managed to hide the truth for a bit at the cost of deeper pain post boom.