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RE: Flashbackfriday - - 1972
So it seems that gold is still tracking along the dollar, or the dollar still tracking the value of gold. Now if we could just get wages to track the value of gold things might look better.
It means that the value of gold has remained relatively constant in real terms, but the value of the dollar has changed. The value of the dollar has dropped a lot since 1972.
Getting rising wages in real terms is hard. Most of the time it is just inflation that makes wages look like they are going up. The only option to get rising real wages is higher productivity.
A tree that might take 10 lumberjacks with axes a full day to cut and haul might be done by one man in the same time if he has a chainsaw and a truck. The guy with the chainsaw earns a much higher wage than the guys with axes because he is more productive.
What happens to the other 9 lumberjacks, though?