Silver and the Minimum Wage
Many of us who write about the precious metals field have put out their 2011 forecasts and predictions for the New Year. This writer is no exception, but it seemed to me that it might be nice to look at my mission statement and determine if I could compose a simple story that might engage the reader to think about the current dire state of affairs in the economy and how an honest “money” system might help on an individual basis.
My mission statement is, “To teach and empower people to understand the benefits of an Honest Financial System.” Although the words gold and/or silver are not even mentioned in my mission statement, they are both very important components in an honest money system—they instill trust. And the lack of trust is the core issue of today’s economic problems. Our banking institutions and well established investment firms do not trust each other, and the system is grinding down.
Looking back in time I found some very interesting facts regarding Henry Ford and the typical North American autoworker. On January 5, 1914, Ford announced that Ford Motor Company employees would receive a minimum wage of $5 a day, more than double the average pay available at that time. This date is just within days of the Federal Reserve Act that Congress passed during the Christmas Holiday in 1913. Basically, Congress relinquished its constitutional power and duty to “coin Money and regulate the Value thereof,” to a private banking cartel, the Federal Reserve System.
Wasn’t this action was a blatant overthrow of The Coinage Act of 1792? Which had been signed into law by President Washington and defined the “dollar” as a coin containing 371.25 grains (troy) of fine silver. This Coinage Act of 1792 established the monetary system the Founders had outlined in the Constitution. (See: what is a dollar?)
So, getting back to the Ford example, what would happen these days if Ford Motor Company decided to pay their employees 5 “honest” dollars a day? Could this be accomplished? For purposes of this article let us round a real dollar to 0.75 troy ounces of silver. Additionally, I am going to use 200,000 as the Ford employee base per Ford’s website for 2009.
Therefore 200,000 employees at $5 (~3.75 troy ounces, based on the Coinage Act) per day would be equivalent to 750,000 troy ounces per day! This implies within a one-month time frame (~22 working days) a total of more than 16 million ounces. This would be ounces paid in the good old days!
What about more recent times say Of course if we check the recent data we find the average pay per employee to be around $30 per hour. We can see that the current price of silver is roughly the same $30 per ounce. So, quite easily we might state one ounces per hour, or 8 ounces per day. So we would have using current silver prices, we have 48 million ounces of silver in used as payment in ONE MONTH!
Much has been made about the “little” guy coming into the silver market and what it could do to the market. I think the above example might give pause to those of us that trust tangible money versus private script. Certainly I cannot state that any major corporation would seriously consider paying honest money to their employees for even as little as one month. But it is not entirely out of the question that 200,000 people decide to put away one month’s worth of wages in the silver market.
Times are changing rapidly and as things continue to worsen with the Federal budget some states are looking at options that might help them. We might say at a state level, people are beginning to realize that the system has failed them. In fact in the past some states have tried to enact silver coinage into legislation, so far this has failed but we note, Idaho, Nevada and New Hampshire have tried in the past, and a few years back Senate Bill 453 was purportedly introduced by Greg Walker, a state senator from Indiana.
In conclusion, 2011 may turn out to be a year where one primary question is not so much who can we trust, but what can we trust?