Since the abolishing of the Gold Standard, the U.S. dollar has lost 97% of its purchasing power. The old joke my parents used to say, “I remember when gum was five cents!” applies here. Ironically enough, in 1938, after post – Depression America, the minimum wage was implemented to give workers a substantial amount of money that was guaranteed to help poverty and combat increasing prices. In reality, prices still rose and because of the abolishing of the Gold Standard, it’s even worse today. The increase of minimum wage causes prices to go up, but not relatively fast. Inflation is an eventual process. But like today where prices are high, the minimum wage doesn’t account for what it originally did. What’s even worse is that with the absence of a necessary good to back the dollar, each time new money is circulated the prices eventually rise and the purchasing power you have also decreases. This means that no matter what the minimum wage is, the poorest will suffer the most because they will have the least amount of purchasing power to account for the rising of gradual prices.
Posted on: Tue, 11 Nov 2014 16:12:51 +0000