Silver vs Fiat: The Fall of Minimum Wage in Real Terms | Mike Maloney

Summary

This video script argues that the US minimum wage has effectively fallen by over 70% in the past 61 years, using the example of silver quarters' value compared to the Federal Reserve notes. It suggests that inflation, a tool of wealth transfer, has disproportionately benefited the top 10%, while the rest suffer from reduced purchasing power. The speaker critiques the concept of minimum wage, its impact on unemployment, and the Federal Reserve's role in inflation, advocating for a return to 'real money' to address economic inequality.

Takeaways

• 💼 The speaker argues that the minimum wage has effectively fallen by more than 70% over the last 61 years, using a comparison to the value of silver quarters in 1963.
• 💡 Luke Groman's tweet is highlighted as a source of inspiration, suggesting his unique perspective on economic issues is valuable.
• 🏦 The speaker criticizes the US CPI (Consumer Price Index) calculations, claiming they undervalue the true inflation rate and its impact on purchasing power.
• 📉 The labor share of corporate profits is said to be at multi-decade lows, indicating a shift in wealth distribution favoring the top 10%.
• 🌐 The speaker suggests that the Federal Reserve's policies are responsible for wealth inequality and economic dysfunction, advocating for its dissolution.
• 💰 The concept of 'fiat currency' is contrasted with 'real money' (silver), emphasizing the devaluation of the former over time.
• 📊 The speaker uses a mathematical analogy to demonstrate the decline in the purchasing power of the dollar, particularly against silver.
• 🚀 The current federal minimum wage is compared to the historical value of silver quarters, showing a significant decrease in real terms.
• 🍔 The speaker discusses the economic implications of artificially high minimum wages, such as increased unemployment and reduced job availability.
• 🏛️ The speaker criticizes government interventions like minimum wage laws and fees on services, arguing they disrupt economic equilibrium and lead to unintended consequences.
• 🌟 The speaker concludes by advocating for a return to 'money' (as opposed to currency) to address issues like unemployment and wealth inequality, suggesting a clearer economic perspective.

Q & A

What is the main argument presented in the video script regarding the minimum wage?

The main argument is that the minimum wage has effectively fallen by more than 70% over the last 61 years when compared to its purchasing power in terms of silver, and that this decline in purchasing power is not visible to most people.

What does the script suggest about the distribution of wealth in the United States?

The script suggests that wealth has been increasingly concentrated in the hands of the top 10%, partly due to the decline in the purchasing power of the minimum wage.

What is the 'CP Lie' mentioned in the script, and why was this term coined?

The 'CP Lie' refers to the Consumer Price Index (CPI), which the speaker accuses of underreporting inflation and thus hiding the true extent of the decline in the purchasing power of the minimum wage. The term was coined by the speaker in his first book to highlight this perceived deception.

How does the script connect the minimum wage to the concept of 'real money' and 'fiat currency'?

The script contrasts 'real money', represented by silver dollars in the past, with 'fiat currency', the Federal Reserve notes of today. It argues that the value of the minimum wage in terms of 'real money' has significantly decreased when compared to its value in 'fiat currency'.

What is the speaker's view on the current state of labor share and political dysfunction in the United States?

The speaker believes that the labor share of corporate profits is near multi-decade lows and that political dysfunction is at multigenerational highs, both of which are driven significantly by high income inequality.

What is the speaker's opinion on the current federal minimum wage and its effects?

The speaker criticizes the federal minimum wage, suggesting that it is too low and that attempts to raise it artificially can lead to unemployment and economic dysfunction.

How does the script use the example of silver quarters to illustrate the decline in the minimum wage's purchasing power?

The script uses the example of silver quarters, which were worth $1.25 each in 1963, to show that the equivalent value in today's currency would be $25, but the purchasing power of that amount has significantly diminished, as it would only equate to $10.81 in terms of 1963 dollars.

What is the speaker's stance on raising the minimum wage to an artificially high level?

The speaker is against raising the minimum wage to an artificially high level, such as $10,000 per hour, arguing that it would lead to economic imbalances and make goods and services unaffordably expensive.

What evidence does the script provide to support the claim that raising the minimum wage can lead to job losses?

The script cites examples such as California fast food workers losing jobs after the minimum wage was raised to $20 per hour, and a 45% decrease in Uber Eats deliveries in Seattle after a $4.99 fee was mandated to support drivers.

What is the speaker's view on the Federal Reserve and its role in economic inequality?

The speaker is highly critical of the Federal Reserve, accusing it of either being incompetent for not understanding the wealth transfer effects of its policies, or immoral for knowingly causing such effects. The speaker calls for the dissolution of the Federal Reserve.

How does the script explain the concept of inflation as a form of theft?

The script likens inflation to a form of theft where a 'slice' is taken from the total currency supply, reducing the value of everyone's money without them noticing, thus transferring wealth from the many to the few.