I've been thinking about the price of things and the money it takes to buy them and I've made an obvious but as far as I can tell unrecognized connection.
It's said that the value of the U.S. dollar has been declining for years. Go over to the Dollar Times inflation calculator (I have it bookmarked) and see for yourself.
As I've played around with it I've happened upon an interesting anomaly. It appears that sometime around 1942 the value of the U.S. Dollar started declining steadily. This was almost a decade after FDR decided that gold was only useful for jewelry. 1942 was the first full year of the U.S. involvement in World War 2 so considering the economy was on a wartime footing it makes sense that the consumer economy was going to take a hit. That's what happens when you actually try to pay for the wars you engage in.
What's strange is that it's a trend that's never stopped. It leveled off for awhile during the "Great Recession of 2008" but continued its decline shortly after. Most economists will tell you the only reason it didn't plunge further was due to government intervention and a lack of economic activity in general.
Look, economic babble aside, the truth is that your buying power is continuously eroded over time and there's nothing you can do about it.
Regardless of your political affiliation or whether you care that the money in your pocket has been based on little more than good intentions (Fiat currency) for the past 4 decades the problem is self evident. With apologies to Thomas Jefferson, the "rights " held self-evident have been little more than political marketing for the past century.
After all, even if it's worth less, it just feels good to have a million of something even if it only has the buying power of your kid's lunch money in a few years.
So if our money is worthless, why do we accept the excuse for higher prices being higher costs of production?
Does that sound like a stupid question? Then you're probably a stupid person.
Sorry, but you were probably already chewing on the arm of your chair by now anyway...
What's really stupid is that we accept the fact that our money is worth less which naturally makes things cost more but don't give a second thought to how badly we're getting ripped off.
Let's go back to our Inflation calculator and stick in some numbers. Say $40,000 which was a decent salary in 1985. In fact it was a great salary and in 2013 dollars you could buy $87,217 worth of stuff.
In little more than a generation our money has lost more than half its buying power. Yet our wages are still based on those same 1985 numbers. Somewhere, somebody in HR or accounting thinks that $40,000 will still let you buy a house, feed your family and save a few bucks for a rainy day.
It's perfectly acceptable to raise prices to compensate for a currency with declining value. It's only fair to charge more if it takes more money to produce the same item.
So how is it that demanding fair compensation for slowly killing your soul in some cloth covered cubicle suddenly makes you unreasonable?
If everyone is getting what they need then everyone should be happy, right?
Thing is, very few of us are and the only relief we get are sound bites and token gestures from politicians crafted to quell the uproar till the next news cycle.
It's the reason why politicians don't like to run on their records anymore and instead choose to act like bullies in a schoolyard.
It's not about rich versus poor or conservative versus liberal economics. It's about expecting blood from a stone. It's simple, if your money is worth less you have to have more of it just to maintain your standard of living. A cost of living raise isn't a luxury it's a fact of life when you live in an unpredictable economy.
I don't buy the big business wailing over minimum wage increases either. If you can't afford to pay for the resources you need to conduct business then you don't know how to run your business. It's exploitation, nothing less.
In fact, because business has gotten away with economic indentured servitude for half a century they've actually hurt themselves. It's not the rich who keep the GM's, Chrysler's and Maytags in business. It's the average Joe sitting in the morning commute 5 days a week. If he can't buy your goods you're out of business.
Talk about shooting yourself in the foot.
Why do we accept this? If the value of our money is based on good faith and that faith has been violated then why do we continue to accept the whole premise to start with?
I've often said that the oil companies can charge whatever they want for a gallon of gas just so long as everyone's wages are adjusted to compensate. Charge $20 a gallon for all I care, just make sure the average income is in the six figure range.
If it costs you that much to deliver the product then I should be able to meet that demand from the rewards of my labor. Anything else is economic opportunism on the backs of labor.
In the end , most of us have ended up living one check away from financial ruin while the Suze Orman's of the world chide us for spending our meager resources too frivolously. I know your heart's in the right place Suze but your understanding of economic theory borders on fantasy.
Until the slow slide from employment to indentured servitude stops in the developed world we need to stop blaming ourselves for all the economic ills and personal financial woes.
We need to demand that wages reflect the world we live in now, not the one our grandparents knew. It's not unreasonable unless you sit in the executive suites counting the millions you steal from your employees every day you don't pay a wage based on what used to be called "the cost of living"
Friends it's simple. the rich are getting richer not because they're smarter or luckier than us. They're getting richer because they're benefitting from the fact that you're not getting paid what you're worth.
If you think I'm wrong, well, I can guarantee you're not worried about feeding your kids next month.
Think about it.