The minimum wage in 1963 was over $15.00 per hour, so why not return to those rates? Let’s give liberals what they want and raise the minimum wage to $15.00 per hour and even more! So, how do we do this? Should Congress just vote to raise the federal minimum wage and let Obama sign it into law? Of course not, a federal minimum wage is flat out unconstitutional. There is absolutely no enumerated power in Article 1, Section 8 of the Constitution which allows Congress to legislate mandatory wages for employees.
Now that I appear to have gone completely bonkers, it’s time to explain. The minimum wage in 1963, setting aside its unconstitutionality, was actually $1.25. Adjusted for inflation, that is $9.49 in 2015 dollars. The current $7.25 minimum wage is equal to 92 cents in 1963 dollars. Inflation has gone out of control, because any time the federal government wants, it can just print more money. Doing so automatically devalues all of the rest of the money in circulation. Your wealth is quite literally stolen from you when more money is printed. You still have the same number of dollars, but their purchasing power drops.
Take a look at this chart of historic gold prices. Gold: 1792 – 2014
While the United States was on the gold standard, you can see that the price of gold barely changed from 1792 to 1932, never budging from the 19-20 dollar range. Gold holds its value fairly solidly over the course of centuries. In 1933, Franklin Delano Roosevelt took the United States off of the gold standard, so paper currency was no longer backed by anything of tangible value. The federal government unconstitutionally outlawed the ownership of most gold coins and bullion, demanding that everyone turn it in to the Federal Reserve for the current price of $20.67 per ounce. Once the government had a virtual monopoly on gold after rounding it all up out of private hands, they arbitrarily set a new price of $35.00 per ounce for gold. It was magic! Suddenly all of the government’s gold almost doubled in value!
Beginning in 1964 the United States began removing silver from our coins. All of our coins dated 1964 and prior, with a face value of 10 cents or more, were 90% silver. The half dollar coins continued to contain 40% silver though 1970. The last of the silver was removed from U.S. coins in 1971. The last driblet of actual value was stripped from the currency. Sure, the federal government still set a value of $35.00 for an ounce of gold, but they had all of the gold and the people couldn’t buy it. It was still against the law to own it. At least having the set value stifled inflation.
1971 got worse! Without a drop of silver left for the people, Richard Nixon put the final nail in the coffin of the gold standard. After all, the government can’t inflate money by printing more if they have a fixed price for gold. Even though people couldn’t buy the gold, printed money had an artificial value that didn’t waver, because of its pretend gold backing. Nixon removed the government fixed price on gold, completely severing any real value from printed money once and for all.
If you refer back to the chart of gold prices from 1792 – 2014 you can see the sudden skyrocketing price of gold beginning in 1972. At first glance it looks fantastic, but other than some gold certificates that started being legal to buy in 1964, no one had any gold to sell as the price rose. The price didn’t rise because people valued gold more. It rose, because the Federal Reserve was printing more and more money. The value of gold versus any other general commodities remained the same, but the number of dollars needed to purchase those commodities rose.
Amazingly, in 1975 when the price of gold hit $139.00, seven times what the Federal Government bought it all for, it became legal to own gold again. Now gold was for sale, but there was only one major seller: Uncle Sam. This makes me wonder if there is anything left in Fort Knox. That’s a question no one can honestly answer and a conspiracy not worth delving into right now.
What does any of this have to do with a $15.00 minimum wage? The five quarters that made up the $1.25 minimum wage in 1963 were 90% silver with a 2015 melt value of over $15.00! Reversing all of the damage the federal government has done to our currency since 1933 would put a real value back on our money rather than the artificial value the Federal Reserve places on it. Dropping the minimum wage back to $1.25 per hour and minting our coins from silver again would immediately put more wealth in the hands of burger flippers than the current $7.25 in Monopoly money they currently earn.
It is always easier to do damage than it is to repair it. Reversing the direction the government has taken with our currency and going back onto the gold standard could have some growing pains if deflation were allowed to happen. It would have to be done relatively slowly and in managed stages. Deflation can be worse than inflation. As money becomes more valuable, debts become more of a burden, because wages go down.
We are a nation of people who love our debts. Debt isn’t necessarily a bad thing. It’s because of our ability to go into debt that we can afford to put mortgages on houses and cars and pay for them over time. If you have a debt such as a mortgage, inflation makes it easier for you to pay over time, because money is less valuable and you have more of it, and your debt doesn’t inflate with the money. Debts couldn’t remain static when facing a large deflation or everyone would lose their properties even as their monetary wealth remains the same. This is why the deflation would have to be managed to decrease debt at the same percentage that increased value in money decreases our incomes.
Going back onto the gold standard and managing the deflation that would come along with it, especially with the return of silver coins, is one solution, but quite frankly it is an unconstitutional one. It wouldn’t be advisable to repair damage that was done unconstitutionally, by doing something else unconstitutional. The federal government has no enumerated power to decrease the debts people owe one another just because of deflation. There is another solution, which passes constitutional muster and would take far less time. It could even be painless.
Congress is empowered to coin money. They can also regulate the value of money. These powers are expressly enumerated in the Constitution. There are several reasons we can’t change the name of our money, but we could replace it.
If we were to go back onto the gold standard, Congress could print Dollars 2.0! The gold price could be immediately set to $20.00 per ounce and all U.S. dollar wealth and debts in existence adjusted accordingly. It would be perfectly fair, across the board. Liberals love fair, right? They would also love the fact that there would be no more billionaires. Even people who hoard gold and other commodities would remain unaffected. Their wealth would remain intact. The value of everything would remain the same and it would stay that way. Any value could be set in stone for an ounce of gold with Dollars 2.0, I just like $20.00. This rate would drop the current $7.25 minimum wage down to about 4 cents per hour, but it’s all relative. I think 4 cents per hour is the perfect minimum wage!
Thank you to http://onlygold.com/ for their wonderful chart of historical gold prices!
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