Thursday, October 10, 2013
Writing in Forbes, Keith Weiner of the Gold Standard Institute makes
an interesting analysis of income and costs over the
past half-century, and reaches the following conclusion:
... [T]he wage from an hour's worth of effort ought to be able to buy more than it did, then. Everyone should benefit by producing more with less.According to Weiner, wages have fallen by eighty seven percent since 1965, to the point that an engineer today makes less, measured in gold, than someone earning the minimum wage would have in 1965. Weiner rightly points out that much of this precipitous drop has been masked by more efficient production throughout the economy.
Yet the opposite is true, which is a profound injustice. Not only does the worker not benefit from higher productivity, he is falling farther and farther behind. This explains why today's worker, skilled or unskilled, feels powerless--stuck on a treadmill with no stop button. The first step to liberating him is measuring prices and wages in gold.
Regarding the minimum wage, Weiner's use of that statistic early in his column bothers me since it is arbitrarily set by the government, rather than by market forces. Fortunately, his analysis doesn't lean too heavily on that statistic, and even survives a similar criticism regarding milk prices, which I believe the government meddles with. The latter analysis is saved by the fact that Weiner looks at milk production in terms of the time and effort required to produce it. Those are figures the government can't distort.