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by Michael E. Marotta, 20 Jun 1994
On Sat, 18 Jun 1994 15:10:55 -0500, Peter Gaspar wrote "In cleaning out some old e-mail files I found a question about the buying power of ancient and medieval coins. . . . The single most important number to remember is that the medieval wage for a freeman was one penny a day. With the black death in the 1300's there was a shortage of workers and wages went up, but until then a penny was worth more than a days food, drink, and lodgings on a rather unluxurious level."
First of all, this was a silver penny. The penny lost weight as the kings of England cheated the people to pay for innumerable attempts to be the kings of France. However, the silver penny was about the same as the Roman denarius and the Greek drachma: about 120 to a pound of silver. An Athenian citizen on jury duty or a hoplite soldier both earned an obol or two per day (say, 1/6 to 1/3 penny). A rower on a galley earned about the same amount. (Galley slaves were rare, if they existed at all.) So, we can see that by the Middle Ages, the level of real wages had risen considerably. The manor system of agriculture and the guild system of skilled labor were woefully inefficient by modern standards, but they led to greater productivity compared to the classical world.
The second factor is that overall, the price of silver has been falling since 1600. Classical sources cite ratios of 12:1 and 13:1 for silver to gold. In Flanders and London 1391, an ounce of gold sold for 10 or 11 ounces of silver. By 1700, the price was 17 ounces of silver for an ounce of gold. In 1900, the ratio was 33:1 and today it is 80:1. To get a comparison of real prices over time gold is a better standard. In 1899, wheat was 70 cents a bushel and today it sells for $3 to $5. But in the same period, the dollar has fallen from $20 per ounce to $400. So, wheat is now down to 25 cents (1899) per bushel. Chickens have fallen from 8 cents per pound 0.4 cent a pound. Eggs have fallen from 12 cents to 0.6 adjusted cents per dozen.
It is important to qualify all of these comparisons. In the year 1900, most people lived on farms and even some people who lived in the city raised chickens. Also, you must differentiate the chemical feast hen of the Chicago commodities exchange from the free ranging chickens sold by organic hippies. The latter cost five to eight times more than the former, but I believe that they are still a bargain. In the same period, televisions have gone from costing Infinity to a mere $5 or 1/4 ounce of gold. Also, to be reckoned is the fact that even the poor, condemned to shopping at second-hand stores, own several changes of clothing and more cosmetics than a queen of the 1500s. The mason of the Middle Ages may never have had an orange in his life.
Consider that in 1899 a factory hand or cowboy earned a dollar a day for a 10 or 12 hour day. Adjusted for the price of gold in 1900, the fastfood worker makes $1.50 per day, while the employee with an education and experience makes $5 per day. Looking at it another way, in modern terms with a gold standard, the mason of the Middle Ages earned $4 a day, the cowboy $20 per day, the modern computer programmer $100 per day, showing the phenomenal increase in productivity of our time.
Peter Gaspar's summary can be considered an economic axiom: "a penny was worth more than a days food, drink, and lodgings on a rather unluxurious level." In short, minimum wage always buys the least necessary for the next day's work.
(Note: Today's prices come from the WSJ Commodities page. Prices from 1900 come from the Livingston County Republican (Mich). The UK still mints special proof-like silver pennies. Since the time of George III, these have been .014 oz sterling or about the same as an Attic 1/2 obol. The most recent silver UK coin equivalent to the old silver penny was the pre-1920 6 pence.)
Michael E. Marotta
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