We're in for a wild ride. Exponentially accelerating technological, cultural, and socioeconomic evolution means that every year will see more developments than the previous one. More change will happen between now and 2050 than during all of humanity's past. Let's explore the 21st century and ride this historic wave of planetary transition with a confident open mind.

Wednesday, March 16, 2011

Minimum Wage Past and Present

19th Century 13 year old child laborer versus 2011 McDonalds laborer


Let's compare the salary of a 13 year old Andrew Carnegie making $1.20 dollars a week to the current federal minimum wage salary ($7.25*40=$290 a week).

There wasn't a minimum wage in 1849 so Carnegie pretty much got the lowest possible exploitation price as a bobbin boy (illustrated above). 12 hours a day * 6 day week makes for 72 hours. $1.20 divided by 72 gives Andrew 0.0166 cents an hour. Not bad scamp! But how do you measure up to the modern day wage slave making $7.25 an hour considering all that money printing over the last 160 years?

Let's assume little Carnegie worked a 40 hour week to keep this comparison simply illustrated. That's 66 cents a week.

A gold dollar introduced in 1849 had 1.5048 grams of gold. Andrew thus made 0.993 grams of gold a week (worth $45 in today's money) and 0.024 grams an hour (worth $1.11 in today's money)

A silver dollar introduced in 1840 contained 24.057 grams of silver. Andrew thus made 15.877 grams of silver a week (worth $17 in today's money) or 0.396 grams an hour ($0.43 in today's money).

A large copper cent in 1849 contained 10.89 grams of pure copper. Andrew thus made 718.74 grams of copper a week ($6.64 in today's money) or 17.96 grams of copper an hour ($0.16 an today's money).

Considering the spectacular nose dive of the dollar in recent years (with corresponding decade long "rise" in commodities such as silver, gold, and copper), the "today's money" calculation is not constant. For your information, I used the gold price of 1400 an ounce (off from its recent record peak of 1430), silver price of $34 an ounce (off from its recent record peak of $37) and copper price of $4.20 a pound (off from its recent record peak of $4.60).

Notice anything peculiar about how much Andrew made in different commodities (which were literally money back then as they are now) priced in today's dollars? Surely he couldn't have made $45 or $17 or $6.64 a week simultaneously?

Throughout the 19th century, the US government set an official peg of silver to gold (15.1 price ratio via Coinage Act of 1792 and 16.1 via Coinage Act of 1834) and copper to silver. It roughly but imperfectly corresponded to the actual fluctuating world supply of these commodities. Since the money was not fiat money, the ratios roughly held. In other words, if we still used precious metals as currency, not only would gold, silver, and copper amounts Andrew earned hover a lot closer to each other in valuation but valuation of gold itself would spike dramatically due to its demand as currency. That is a story for another day. Here is a preview.

And this brings us to the minimum wage McDonalds worker making $290 a week (6.4 gold grams) versus Andrew's $45 (0.99 grams). Victory of social progress!? Our modern 2011 bottom wage slaves making 6-7 times their counterparts in 19th century?

Not so fast. Due to capitalist control of the governing bodies, regulation usually occurs when it has already occurred naturally. For example, child labor laws were introduced when majority of businesses stopped utilizing child labor. Regulation only occurs to frame and embed what has already happened. That is, when the moneyed interests still engaging in a certain practice are a minority that can be overwhelmed politically (also note that majority of businesses in the north have ended slavery before northern federal authorities made it illegal).

There is reason to think (due to the suppression of gold and silver metal price by major financial interests in the last few decades) that the minimum wage already is at the bare minimum that is tolerable by the human herd and not something that is in any way intolerable to businesses paying it out. In other words, if it was to be eliminated tomorrow we would not have wage slaves selling themselves for $1-2 fiat dollars. This will become more evident as major fiat non-backed currencies of planetary powers go through their inevitable debt bubble collapse.

Considering millions of adults in United States work for minimum wage there is reason to believe they are not only being exploited at the same financial level of 19th century peasant children, but that they are actually being exploited more (and it is set in law and marketed as progress!)

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