You Have Not Had a Raise Since 1970

You Have Not Had a Raise Since 1970

 

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Introduction

Workers in many industrialized nations have been confronted with the harsh reality of salaries that have remained stagnant over the previous five decades, despite the expansion of their economies and developments in technology. The detrimental impact that inflation has on consumers’ ability to make purchases can, in the eyes of many, be explained by this phenomenon. 

 

In this article, we will investigate how the steady erosion of the real value of salaries caused by inflation has left employees battling to maintain their level of living. We will be able to shed light on the long-lasting influence that inflation has had on the economy as well as the lives of employees if we analyze the relevant facts.

The Impact of Inflation on Wages

Inflation refers to the general increase in the prices of goods and services in an economy over time. While moderate inflation can be a sign of a growing economy, prolonged high inflation rates can lead to a reduction in the purchasing power of money. Inflation is a major concern for workers as it affects their ability to afford essential goods and services with the same nominal wage.

 

The year 1970 holds significant importance as it marked the beginning of a prolonged period of inflation in many developed countries. Since then, wages have struggled to keep up with rising prices, resulting in a stagnation in purchasing power for the average worker.

Erosion of Purchasing Power

To understand the erosion of purchasing power, let’s compare the value of wages in 1970 to their value in recent years, adjusted for inflation. According to the U.S. Bureau of Labour Statistics, the minimum wage in 1970 was $1.65 per hour. The federal minimum wage in 2023 will be $16.65 per hour. On the surface, there has been a significant jump in the numerical value of the minimum wage.

 

However, that numerical increase has not resulted in increased purchasing power. To prove that, we’ll crunch some numbers. Remember, the minimum wage in 1970 was $1.65. Now, in 2023, it is $16.65. A gallon of gas was $0.35, now it is $6.06. That means in 1970, the minimum wage could buy 4.71 gallons of gas, but now it’ll only buy 2.74 gallons

 

Statistics also show that the median household income, adjusted for inflation, has barely increased over the last few decades. According to the Pew Research Centre, the median household income in the United States in 1970 was around $42,000 (in 2021 dollars), while in 2021, it was just over $68,700. Again, although there has been an increase in nominal income, it has failed to keep up with inflation, leading to a decline in actual purchasing power.

The Rising Cost of Living

The impact of inflation becomes more pronounced when we consider the rising cost of living. Essential goods and services, such as housing, healthcare, and education, have seen exponential price growth, far outpacing wage increases. Housing, in particular, has witnessed a significant surge in prices, making homeownership increasingly unaffordable for many.

 

Moreover, the costs of healthcare and education have risen significantly, putting additional strain on families budgets. As a result, workers find themselves struggling to make ends meet, despite working harder and longer hours than previous generations.

Impact on Quality of Life

The erosion of purchasing power due to inflation has not only affected the economic well-being of workers but has also had adverse effects on their quality of life. With stagnant wages and rising living costs, people find it difficult to save for emergencies, invest in their future, or enjoy leisure activities. Additionally, the lack of financial security has increased stress levels and impacted overall mental and physical health.

How Can You Fight Inflation?

Gold has traditionally been seen as a store of wealth, which means that gold IRAs have the potential to serve as a hedge against inflation. Holding physical gold in an individual retirement account (IRA) allows investors to diversify their portfolios, maintain their purchasing power, and protect themselves against the devaluation of fiat currencies during times of rising inflation. 

 

The consistent demand for gold on a global scale is an opportunity for long-term investment; nevertheless, before making any choices, one must take into account their unique circumstances and level of risk tolerance. Keep in mind that careful research is required, and if necessary, seek the assistance of professionals.

 

Here are some specific things you can try to protect against with Precious Metals

 

  • Invest in Assets: Diversify your investments into assets that tend to outpace inflation, such as stocks, real estate, and commodities like gold.

 

  • Adjust Budgeting: Prioritize needs over wants, cut unnecessary expenses, and maintain a balanced budget to mitigate the impact of rising prices.

 

  • Fixed-Rate Debt: Opt for fixed-rate loans or mortgages to lock in borrowing costs, protecting against increasing interest rates during inflationary periods.

 

  • Increase Income: Look for opportunities to boost your income through side jobs, freelancing, or investing in income-generating assets.

 

  • Inflation-Indexed Investments: Consider inflation-protected securities or bonds specifically designed to keep pace with inflation.

 

  • Diversify Currency Holdings: Hold currencies of countries with lower inflation rates to preserve purchasing power in international markets.

 

  • Negotiate Contracts: Negotiate long-term contracts to lock in prices for essential goods and services before inflation impacts them.

 

  • Keep Emergency Funds: Maintain an emergency fund to cover unexpected expenses and reduce the need to liquidate assets during inflationary periods.

 

  • Monitor Inflation Rates: Stay informed about inflation trends and adjust financial strategies accordingly to proactively respond to changing economic conditions.

Conclusion

The absence of substantial pay raises since 1970 has put workers at a disadvantage in coping with the relentless effects of inflation. The rising cost of living, coupled with stagnant wages, has significantly diminished the purchasing power of workers over time. This situation has far-reaching consequences, affecting not only individuals but also the overall economy.

 

To address these challenges, policymakers need to consider measures that protect workers from the adverse effects of inflation. Implementing fair wage policies, investing in education and healthcare, and promoting sustainable economic growth are some potential solutions. By addressing the root causes of wage stagnation, we can strive for a future where the growth of purchasing power aligns with the growth of the economy, ultimately benefiting workers and society as a whole.

So you have decided to buy silver online.

Great choice. Let’s talk about silver.

Silver is exceptionally popular today. Part of the reason for this is the belief that it’s potential for upside value increase is even greater than the same belief in gold. In fact, there is a very good book on this subject entitled: “ Why Silver Will Outperform Gold by 400% in the coming years”. It’s a very scholarly book and quite convincing. Give it a read if you have the time.

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Mind you, one need not look as far as that book to find evidence of the common belief that silver has great potential for growth in the near future. All one has to do is go to the web or even Youtube and there are advocates of this thought at every turn.

At Durham Precious Metals we believe that silver is an easy choice because it gives a sense of substance due to its lower cost per ounce than gold.

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Probably 90% of our business is silver sales so this sentiment is fairly unanimous throughout the public. 10oz bars seem to be the most popular. Generic rounds and Silver Maples seem to be the next most popular and 1oz bars a close 4th place. It is our opinion that 10 oz bars and 1oz rounds are your best value as their premium over spot is very reasonable. However, there is no wrong choice when it comes to our silver product line because we try to concentrate on product lines with low premiums anyway.

Silver has always been a form of money. There are those that will argue that silver has been demonetized but we beg to differ. All one has to do is refer to the (CCRA) definition for 999 bullion. It is deemed by Rev Can to be a “ financial instrument”. Enough said on that subject!

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From a utility standpoint, silver has somewhere in the neighbourhood of 60,000 industrial uses including painting the backs of mirrors to create the reflective surface to collecting radiation in solar panels. If nothing else, the lack of an above ground supply of silver ( which is relatively new historically) will keep the demand for this metal strong since for most applications there is no viable substitute.

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Can you imagine the mayhem that would ensue if all the major electronic manufacturers came grinding to a halt due to a silver shortage? It would be catastrophic to the economy. We believe that this fact alone will be a major driver of support for the silver price when the powers that be run out of tricks in their attempt to suppress the price of silver. And yes, we agree that this practice goes on in plain sight and that the regulators turn a blind eye. Let’s hope justice prevails and that the historic silver/gold ratio returns to its traditional level.

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In the meantime…keep stacking!

So you have decided to buy gold online.

Great choice! Let’s talk about gold then, shall we?

Gold is, and always has been, a favorite of collectors of precious metals. Its 6000-year history of sustaining wealth is unprecedented. The yellow metal has launched wars, bought fortunes and has been a form of money throughout that history. It is one of the densest metals and also one of the densest elements on the periodic table. It weighs in at a density of 19.32 grams per cubic centimeter. Water, by contrast, has a density of 1 gram per cubic centimeter.

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Platinum is the densest of the common 4 precious metals at 21.45 grams per cubic centimeter.

People will often ask when gold is the right choice to buy as opposed to other metals such as silver. This is a very common question. There is no easy answer that anyone can give to someone so we always boil it down to practical applications.

Gold Bullion

Consider how much of an investment you are planning to make over-all throughout the course of your precious metals buying.  If you are planning on purchasing, for example, $10,000 worth of metals and then cap your spending then it really doesn’t matter which metals you buy. The volume of the purchase will be relatively small in terms of weight and size. Our main concern and Durham Precious Metals comes down to simple things like , cost of storage, cost of shipping and bulk. We are always trying to help our customers have the best experience as metals collectors.

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For example, if you were to tell us that you are considering selling a piece of real estate and use the proceeds to buy metals then gold would be our suggestion. The reason comes down to volume and weight at this point. Several hundred thousand dollars of silver would be an incredible amount of bulk at this spend level. Hundreds of pounds of silver would be hard to store practically and would be more expensive to store as well. If you are the DIY type it would also be harder to hide than a comparable dollar amount of gold.

Keep in mind that at the time of this writing gold is about 75 times more expensive in dollar terms as the same weight of silver. That equates to 75 times less bulk per dollar spend. This will make it much easier to hide or store if you are looking at large purchase amounts.

Price of Gold?

If you are only considering a small total purchase amount either of the metals is perfectly fine. The one consideration we always emphasize for small purchase amounts really comes down to personal perception. Here is what we mean. Silver is 75 times more bulky per dollar spend. Obviously, it is going to feel a lot more substantial if you buy $5000 worth of silver and have several hundred ounces to admire than only about 3 ounces. It’s a perception thing at this point but perception matters to people since perception can make us feel a particular way about what we spend our money on.

In closing, gold and silver are both great choices and neither is wrong in terms of their value of utility. They have both had a long history as a store of wealth and that isn’t likely to change any time soon.

Buy both with confidence. Buy Gold Online

We often carry pieces that we don’t list on site so feel free to call us for an up-to-date list.

About DPM

When you consider silver value and gold value, the wise choice is to stock up today. At Durham Precious Metals we make it easy and convenient to buy silver and buy gold online.

For those who are serious about investing in gold and silver bullion, DPM is your one-stop store to buy gold and buy silver, whether it be through our website or our retail store.

Many people want to know where to buy gold and do not realize they can avoid the traffic hassle of driving into the city and visit us at DPM located in Oshawa, Ontario. See our Retail Store page for directions. Our customers are delighted with our competitive silver price. We carry mint direct silver bars, silver coins, gold bars and gold coins.

Make Durham Precious Metals your choice for gold and silver bullion.

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