1933 was the last time that a U.S. citizen could walk into a bank and redeem gold for their dollars. At the time, given the average hourly wage of $0.47 and the pegged gold price of $20.67 per ounce, an ounce of gold represented about 44 hours of labor. Today, with an hourly wage of $36.30 and a gold price of $3,400 per ounce, that same ounce represents about 94 hours of labor. More than a 2x drop. If that ounce represented the same 44 hours it used to, the average hourly wage would be $77.55. That’s be a six figure annual income with 25 hours of work per week and two weeks off per year. We have no idea what we’ve lost, my friends.
Replies (3)
And that’s with a gold price that has been suppressed!
How does the gold supply being about ~4x greater than 1933 affect this calculation? Assuming ~1.5% gold supply increase per year.
Fair question! The amount of above-ground gold per person has stayed between ~25-30oz since around 1500AD.
A more qualitative answer: From my understanding, throughout history, give or take, an ounce of gold could get you a nice suit, and an ounce of silver could get you a good steak dinner. The latter isn’t quite as true today since the gold/silver price ratio is so historically high, since silver isn’t used as a medium of exchange anymore.
All that to say that unlike bitcoin-priced wages, gold-priced wages decreasing so quickly is historically unusual.
