{"id":47735,"date":"2021-05-31T04:15:23","date_gmt":"2021-05-31T11:15:23","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=47735"},"modified":"2024-03-25T09:01:53","modified_gmt":"2024-03-25T16:01:53","slug":"historical-gold-and-silver-benchmarks-for-job-wages-and-commodity-prices-2","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id47735-historical-gold-and-silver-benchmarks-for-job-wages-and-commodity-prices-2.html","title":{"rendered":"Historical Gold & Silver Benchmarks for Wages and Commodities"},"content":{"rendered":"
\"\"<\/a>

This silver denarius was the daily wage for common Roman soldiers and unskilled labor more than 2000 years ago. Based upon the current price of silver, the melt value is less than $3.<\/p><\/div>\n

As the value of the dollar continues to erode — and with inflation raging almost everywhere you look — price distortions have become so large that it’s getting harder with each passing day to know the actual value of anything anymore.<\/p>\n

The best way to identify the true<\/strong><\/em> value of wages, goods and commodities is to look into the past and compare their historical prices in terms of gold and silver because, unlike fiat currencies, they can’t be created out of thin air; as such, the purchasing power of gold and silver are remarkably stable<\/a>.<\/p>\n

Of course, such a methodology isn’t perfect. For example, productivity gains due to technological improvements may reduce the prices of certain goods and other commodities today — but it does provide us with an extremely reliable approximation nevertheless.<\/p>\n

Goods and Commodities<\/strong><\/p>\n

The Romans minted a popular silver coin called the denarius, which contained roughly 0.12 troy ounces of the white metal. The Book of Revelation notes that one denarius could purchase a quart of wheat (1.7 pounds), or three quarts of barley (3.8 pounds). And historical evidence shows that a denarius would also buy three kilos (100 fluid ounces) of olive oil.<\/p>\n

\"\"<\/a>

The gold florin. You could buy a mansion with 1000 of these 0.1125 troy-ounce coins in the 15th century.<\/p><\/div>\n

The fiorino d’oro<\/em>, or gold florin, was minted in 1252 at Florence and contains 0.1125 troy ounces of the yellow metal. In terms of purchasing power, we know that in the 15th century 1000 gold florins could buy<\/a> a “handsome palazzo” (113 troy ounces). We also know that the Medici Palace was worth about 5000 florins — that’s 563 troy ounces of gold.<\/p>\n

In 1850, a pound of beef or bacon<\/a> could be had for ten cents; this is when gold was $20.67 per troy ounce. Not surprisingly, this lines up with the historical narrative that one ounce of gold has always been able to buy approximately 225 pounds of beef or bacon.<\/p>\n

More recently, an acre of farmland in Kansas<\/a> could be had for $20 US dollars in 1900. Keep in mind that the $20 gold double eagle coins that were in circulation at the time contained 0.9675 troy ounces of the yellow metal.<\/p>\n

Meanwhile, at the end of World War II<\/a>, a loaf of bread in the US could be purchased for as little as a silver dime (0.07 troy ounces), and a gallon of gasoline cost a silver quarter (0.18 troy ounces).<\/p>\n

Wages<\/strong><\/p>\n

Financial analyst Rob Kirby notes that for 3000 years an upper-middle class annual wage<\/a> was between 40 and 60 troy ounces of silver. We know this because the Greeks and Romans were meticulous record keepers — which provides a nice starting point for translating yesterday’s wages into the estimated equivalent paychecks for today’s laborers.<\/p>\n

There are numerous historical examples that show the average pay for a full day’s worth of unskilled labor has been 0.1 troy ounces of silver. Yes, one-tenth of an ounce!<\/p>\n

It is generally accepted that lower-tiered Roman solders were paid a single silver denarius (0.12 troy ounces) per day. Likewise, Matthew 20:2 in the New Testament refers to the denarius as being the daily wage for a common vineyard laborer. So, assuming a six-day work week, that equates to 312 denarii per year — or an annual income of 37.5 troy ounces of silver for common laborers and soldiers.<\/p>\n

But what about skilled labor and military officers? Well, we know that a talent of silver would pay a skilled craftsman’s wages in Greece for nine years<\/a>; a Greek talent is approximately 836 troy ounces. Therefore, one can grossly estimate that the annual wage for a skilled craftsman back then was in the neighborhood of 93 troy ounces of silver. As for the military, the lowest-tiered Roman Centurions received 3750 denarii<\/a> per year, while the highest ranking officers earned 15,000 denarii (between 450 and 1800 troy ounces).<\/p>\n

Richard Goldthwaite, in The Economy of Renaissance Florence<\/em> notes that the supervisor and architect of the Florence cathedral was paid a salary of 100 florins per year in the late 13th century, or 11.25 troy ounces of gold. In fact, a man could live very comfortably back then with an income of 150 gold florins (17 troy ounces).<\/p>\n

We also know that, in the 15th century:<\/p>\n