If we were to ask fellow American citizens, “do you believe that wages, in our country, essentially, have been stagnate, for many years”? I am pretty confident that most Americans would say, “yes,” and agree that wages, today, do not rise at the same percentage that they once did. I would, also, agree with that sentiment, and would add that, once upon a time, companies, perhaps, were much more generous with things such as Christmas bonuses, profit-sharing etc. Unfortunately, however, the commonly accepted belief tends to be that companies, CEOs etc., today, are just plain greedy, and that the average worker is, simply, being screwed. While, there may be some truth to these sentiments, I believe, it completely misses the point, and fails to pinpoint the root cause.
Allow me to quote from this previous post, in which I was attempting to make the case as to why raising the minimum wage is a bad idea, and to point out the unintended consequences that come along with doing so:
“While, a minimum wage, on the surface, may seem like a compassionate public policy, it is actually a policy that keeps the skilled, and experienced workers, working, and freezes out the less-skilled, and first-time workers, by forcing business owners to pay a salary that is higher then they are willing to pay for a certain employee or service. It not only freezes out first-time and low-skilled workers, but it could, very well, cost certain current employees their jobs, if the employer no longer feels that a particular position is worth the price that they are being forced to pay. At some point, it could even cause businesses to close up shop, and take their businesses to another State, or even overseas, should the cost of doing business get too costly.”
Yet, in New Jersey, the voters, through a State referendum, just voted to add an amendment to their State Constitution, forcing business owners to pay a higher minimum salary, each subsequent year. And, there is, currently, a push in our Federal Government, as well, to raise The Federal minimum wage.
Unfortunately, Governments have convinced countless citizens that, because of the higher cost of living, employers must be mandated, by the State, to pay an employee a higher wage, regardless if the employer believes that the service being provided by the employee is worth the mandated wage.
“Then, there is the cost of living:
The increase in the cost of living has nothing, whatsoever, to do with business owners, or any private citizens; inflation is caused, solely, by our Federal Government. More specifically, it is caused by the incessant printing of money by The Federal Reserve, which “devalues our currency,” and therefore, causes everyone, including business owners, to pay more money for the same goods and services. The result of these failed policies is a rise in the cost of living, for every single American.”
And, therein, is the real root cause – which is inflation. Once upon a time, we had a sound currency system in The United States. In the beginning, our Founders, in Article 1, Section 10, Clause 1, of The United States Constitution, wrote that: “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts;” meaning that, only gold or silver Coins could be used as legal currency. Even after paper currency was, eventually, introduced into our monetary system, those paper notes were still redeemable for a predetermined amount of gold or silver. In 1881, President James Garfield included the below, insightful, words, in his Inaugural Address:
“The chief duty of the National Government in connection with the currency of the country is to coin money and declare its value. Grave doubts have been entertained whether Congress is authorized by the Constitution to make any form of paper money legal tender. The present issue of United States notes has been sustained by the necessities of war; but such paper should depend for its value and currency upon its convenience in use and its prompt redemption in coin at the will of the holder, and not upon its compulsory circulation. These notes are not money, but promises to pay money. If the holders demand it, the promise should be kept.”
And, President Garfield was spot on! Our current system of currency is tantamount to a person writing you a check, but when you get to the bank, and hand the teller the check, you find that there is no money in the person’s account who wrote the check. Stated differently: There is nothing of real value behind our (paper) currency.
Once upon a time, Our Federal Government purchased x amount of gold and silver, and from there, a “finite” amount of currency was created, and injected into the system. Being that there was a finite amount of currency, the dollar held it’s value. And, since all currency was “redeemable” in either gold or silver, respectfully, it prevented our Federal Government from (inflating) devaluing our currency, by printing money that they could not back in gold or silver.
Certainly, because our currency is legal tender, it gives us purchasing power; and, the more of that currency we have, the more purchasing power we have. But, that is also part of the deception! It is said that, since (1913)The Federal Reserve was created, and Congress abdicated their Constitution Powers to regulate our monetary system to The Federal Reserve, that, the dollar has lost approximately 95% of it’s value. That means, one hundred years ago, our citizenry could buy far more goods and services with the dollars that they earned. For those of us who are old enough to remember our grandparents saying that, they could buy a loaf of bread for a nickel, that is exactly the reason why. It isn’t that, today, all of sudden, the ingredients and labor that go into making a loaf of bread, takes much more manpower, or resources to produce; it is, wholly because, our dollar, today, is worth so much less. With modern manufacturing techniques, automation, better modes of transportation, and increased competition, a loaf of bread, in my humble opinion, should cost far less then then it did for our grandparents.
For years, we have all been hearing about inflation; and, most of us understand that, inflation means, it takes more money then before to buy the same goods and services; but, the problem that we face, largely, in this country is that, so many people are unaware of the root cause of inflation. The famous author, Ayn Rand, described it as such:
“Inflation is not caused by the actions of private citizens, but by the government: by an artificial expansion of the money supply required to support deficit spending. No private embezzlers or bank robbers in history have ever plundered people’s savings on a scale comparable to the plunder perpetrated by the fiscal policies of statist governments.”
And, Ayn Rand was spot on, as well! Inflation not only causes goods and services to rise in cost, but it devalues the money that we currently have in our savings, as well! Inflation, in short, is confiscation without representation! It allows The Federal Government to spend our money, on God knows what, without as much as a vote in Congress.
So, as Americans, under this current system, we have been led to believe that, as long as we are making more money, we are increasing our wealth; or, if Government forces business owners to pay us more money that, we will be much better off. But, the truth be told: It isn’t really about how much money we earn; rather, the question that should be asked is, how much is the money we earn actually worth?
Posted, originally at, The Original Republican