How More “Money” Makes Us Poorer

Fresh perspective on my engineering salary.

Source: Daily Mail

Atlanta, GA

May 6, 2025

Inspired by reading a wonderful book, my friend Matt Smith has written an eye-opening essay.

I read David McCullough’s Path Between the Seas several years ago, while sailing thru the Panama Canal. As a civil engineer reading about what I was watching out my window, the account was fascinating. As an economist and historian, it was illuminating.

But Matt shed light where I hadn’t looked. McCullough was a terrific storyteller who could lavish intricate details without encumbering a tale. Matt found one that I’d somehow missed despite it being so shocking:

“In The Path Between the Seas, David McCullough describes life in the Panama Canal Zone around 1910. He notes that a junior civil engineer—just 2 or 3 years into his career—was paid $250 a month, or $3,000 a year.”

To modern ears, this sounds like a pittance. But that’s because fiat money has distorted our sense of scale and notion of value.

Thick Fog

The canal opened on August 15, 1914… six months after imposition of the income tax, eight months after the Federal Reserve opened its doors, and fifty-seven years to the day before Nixon cut the dollar’s last link to gold.

But in 1910, as Smith reminds us, the dollar was gold. Each one represented a twentieth of an ounce. And none were taxed as income. Our engineer on the isthmus kept everything he earned.

Eighty years later, I was a civil engineer working on another iconic landmark, albeit with more concern for thick fog and salt air than oppressive heat and endemic malaria. While my predecessor in Panama was paid his quaint salary to carve a canal, I received about twelve times as much to help retrofit the Golden Gate Bridge.

Or did I? Matt discovered that maybe the fog is even thicker than we thought.

Unlike my counterpart on the canal, the government took about a third of my earnings. But direct taxes were the least of the larceny. The real robbery came thru inflation.

In gold terms, the dollar had already deteriorated by 95% from the advent of the Fed to the day I received my engineering license. It’s lost another 90% since. Half its value vanished in the five years since Tony Fauci became a household name! That last nugget seems impossible, but isn’t a shocker to anyone who shops.

But why? What’s going on?

The Real Schmuck

I was initially paid about $35K to be a civil engineer in one of the most expensive cities in the country. For that, I could afford a decent apartment (no roommates) in a nice area. I kept a car with its associated costs, could afford to eat out regularly, travel occasionally, and to save a portion of every check.

Not bad. Surely I was making more than some turn-of-the century schmuck on the canal?

As Matt details, at $20/oz the canal engineer’s $3,000 salary represented 150 ounces of gold. I arrived at the Golden Gate Bridge two decades after the last vestige of gold was stripped from the dollar. During that time, the dollar declined about 90% relative to gold.

After taxes (which the canal engineer didn’t pay), my nominal salary was about eight times what I would’ve made helping design the passage thru Panama. But my real pay (about 60 ounces of gold) was only a third as much.

I’d have needed to almost triple my gross salary to match the real take-home income of my Panama counterpart. Sound money reveals the real schmucks. Which is why issuers of phony currency want to keep the curtains drawn and the vault sealed.

But Matt continued to pick the lock, and what he found was truly startling. Today’s entry-level civil engineer receives only about a third the real pay that I did! At today’s average starting salary of $80K, he retains about $56K after taxes. This represents fewer than 19 ounces of gold.

By contrast, the 150 ounces the canal engineer took home would equate to $450,000 in 2025. This implies almost a 90% cut in real pay for entry-level civil engineers since 1910, despite a nominal gross salary that’s grown more than 25 times.

As Matt reminds us, those currently earning more than $407,000 comprise the top 1% of US earners. That would include a junior civil engineer from 1910, who was 10% above this threshold. Today’s junior civil engineer is 80% under it.

The Real Culprit

For several decades… and certainly in recent years… most of us have sensed something is wrong, even if we can’t put a finger on it. Matt Smith does so in his essay, and what he reveals takes us aback.

The proliferation of fake money hasn’t simply made things more expensive. As I’ve detailed elsewhere, it’s made us poorer… culturally, materially, physically, and spiritually. And it’s done so thru the insidious grift of a disorienting dilution.

A corrupt currency robs us not only of our wealth and well-being, but of the ability to recognize the weapon being wielded. Aspersions are cast on “greedy” corporations, “selfish” consumers, perfidious foreigners, and other convenient scapegoats that divert attention from the real culprit.

For more than a century, we’ve measured “wealth” thru the opaque prism of fiat money. As with any flexible gauge, it’s a flawed metric that warps our idea of what things are worth. It’s like reducing the number of inches in a foot to convince ourselves we’re getting taller.

Without a reliable anchor to moor its money, society drifts, until it sinks. Thanks to Matt Smith, we have a better sense why we’ve been taking on water.

JD