A new golden age for workers

Since the dollar went off the gold standard, workers’ share of the fruits of their labor has been consistently siphoned off.

images courtesy of wtfhappenedin1971.com

The mainstream thinking on this is that it’s due to “neoliberalism” and basically Republican policies that favor the rich. Maybe that’s part of it. But there are also monetary reasons. Here are three reasons that workers will do a lot better once we return to a hard money standard, by embracing bitcoin.

Earning more by default

Under an inflationary regime, workers must continuously renegotiate their wages or else they will fall behind.

If the total amount of money in the world is increasing, then your real wages are decreasing. The only reason you’re not actually getting poorer is because the total productive capacity of the economy is growing enough to keep you treading water.

This system is regressive in numerous ways, one of which is that it gives employers a better bargaining position over employees. Unless the employees take action to renegotiate periodically, their real wages are declining, and the employer is enjoying a larger and larger share. The onus is on the employee to renegotiate.

Contrast this to an economy which uses a bitcoin standard. Under a standard where wages are fixed in bitcoin, employees are actually earning an ever increasing real wage over time. This puts the onus on the employer to periodically approach the employee and try and win them over to a lower wage. Granted, employers are still in a strong bargaining position, but the dynamic shifts to where the worker is winning by default.

Fewer lies– more truth

When a company makes a promise to pay workers after they retire, inflation helps the company and hurts the worker. The amount of value that is being paid to workers is less than they were promised. It is a kind of softly broken promise.

Similarly, Social Security takes money from you today, and pays you back later, after the money has lost value from inflation.

Under bitcoin, if a company makes a pension promise, the value of that promise can’t be inflated away. If the company can no longer afford to make payments, they will have to default on the promise explicitly which will hurt their credibility and reputation.

Bitcoin will keep companies and governments honest about the actual amount of value being transacted in the future. This will help workers, who usually end up on the wrong side of these unfair trades.

Access to real savings

When a worker earns more than they need to survive, they can save some money. Under the current system, their savings lose value constantly. Under bitcoin, workers will be able to save in currency which appreciates in value and matches the growth of the economy. The simple act of saving in bitcoin makes you a part of the capitalist and investment class. Never before has this kind of savings vehicle been available.

The only truly scarce resource is our time. The market has been under-pricing the value of our time for the last 50 years. As we begin to adopt bitcoin, the market will begin to pay us a more fair wage. We will move into a new golden age for workers.

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