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Vod Day discusses a Forbes article which reveals that a minimum wage worker in 1965 earned more in terms of real wealth than a professional engineer does today.
In 1965, a minimum wage worker earned enough money in a year to purchase 71 ounces of gold. In 2011 a senior engineer earned enough money in a year to buy 63 ounces of gold.
In 2013, a minimum wage worker earns enough money in a year to buy twelve ounces of gold.
My brain just balks at that. The issue is a very complex one--enough so that I despair of explaining it simply--but at the core of it is the fact that we should be a lot richer than we are.
Productivity gains are part of the issue. We're more productive now than we were in 1965, and for the most part everything costs less to produce, but most of that efficiency has been skimmed off the top and used to generate more wealth and power for the aristocracy rather than allowing the people to live better. We're working just as hard as we have in the past and producing more, but because of how things have been run we're not seeing any of the benefits of it.
We ought to be working fewer hours per week for more money. Instead we're working more hours per week for less. Government now consumes over 20% of the economic output of the nation and the average middle class family expends half its income on taxes and fees.
It's not a case of inflation because if that were the case, minimum wage would still earn about the same amount of gold as it did forty years ago. But explaining where the wealth has gone is very, very difficult, because it's essentially just been pissed away. It's not like we made a huge investment in something expensive; the money just got spent piecemeal on little things here and there, and it's gone.
But detaching the dollar from the gold standard is probably at least part of the problem. Spending a lot of money on foreign oil is probably another part. Socialism is a huge chunk, considering that 1964 was when the "Great Society" was passed and we've funneled literal trillions of dollars into that black hole--welfare, medicare, medicaid, etcetera--and the money government consumed to fund those programs also could have been used for other things with a positive return on investment, so there's also a huge opportunity cost. And the constant influx of illegals has served to keep wages stagnant.
...I'm still working on analyzing this. Karl Denninger has brought this issue up many times, and there's an essential truth lurking somewhere in this rat's nest, but I'll be switched if I can find it. The main point is that it didn't have to be this way and in a better world we would be living at least as well as our parents did in 1950.
In 1951, fresh out of college, newly married, and just starting out in a middle class career position, my Dad--the sole breadwinner--bought a power boat and towed it with his car. (My parents kept that boat until Dad took a transfer to California.) That can't be done today, not when a boat costs more than a new car and the average family car cannot tow much of anything; if you want to haul a boat around you need a pickup truck or an SUV, and those aren't cheap, either.
But that's not how we're doing. In 2013 a kid graduates from college in debt to his hairline and can't earn enough to pay back his loans, much less start a family and buy a boat and-and-and.
As I said, though, I'm still trying to figure out what's at the core of this.
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Are EBT cards failing because of the shutdown?
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Anyway, that's really all I've got.