1. Banananarchiste

    Banananarchiste Member

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    Don't forget the dollar value! (help for economic information please?)

    Discussion in 'Setting Development' started by Banananarchiste, Aug 29, 2017.

    Hello,

    (Please pardon me for my poor english, french writer here)

    Maybe the older writers will know this by experience, but while working on my main character I realized something really important in a story setting. The novel is set in Montreal during the late 90s (Sept. 1998 - Sept. 1999). My my main character is 16 years old and works to pay his rent.
    In Quebec today, the minimum income per hour is roughly 11.25$. While looking how much the minimum wage was in 1998 I found it was 6.90$ (And 4.00$ in 1985).
    The value of the dollar variates all the time for many reasons I don't know exactly.

    So please: don't forget this because you may think: "Well of course the dollar isn't the same during the seventieth century". But it was also way different ten or twenty years ago. The prices of everything was different, from a car to a can of soda. It is a small aspect that must be respected.


    Lastly, can anyone please explain to me the reasons of the variations of dollar value please?

    Thank you very much and have a great day.
     
  2. Tenderiser

    Tenderiser Not a man or BayView

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    That's a question far too complex to be answered on a forum. :D In a nutshell, the answer is inflation... but the causes (and effects) of inflation are anything but simple.

    Maybe think of it as supply and demand. In very general terms, workers expect an annual pay rise - minimum wage tends to increase a little each financial year (at least here it does) and other wages and salaries follow. Retailers and service providers know this, so they increase the cost of their products and services each year, knowing that people can afford it.

    There are a million other factors involved and my example is a vast oversimplification, but maybe it'll help.
     
  3. The Dapper Hooligan

    The Dapper Hooligan (V) ( ;,,;) (v) Contributor

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    Very rough and basic explanation is inflation offset by minimum wage increases. It's all very supply and demand and very complicated and rather boring.
     
  4. Tenderiser

    Tenderiser Not a man or BayView

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    Why, Hooligan, we have to stop posting like this!
     
  5. The Dapper Hooligan

    The Dapper Hooligan (V) ( ;,,;) (v) Contributor

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    @ Tenderiser This is the second time this morning you've beaten me to a post. You must type like a madman.
     
  6. Banananarchiste

    Banananarchiste Member

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    Thank you both

    I actually had some lessons over this over the last two years, but I suck at this and yes, it is rather boring (to me at least).
    But thanks to you it's coming back in my mind now.
    While the wages and the prices grow, doesn't the 'value' of the dollar lowers? (Like the 'power' of yens is way lower then the dollar.)

    Thank you :)
     
  7. terobi

    terobi Senior Member

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    Still very very complicated, very boring, and based on several different levels of supply and demand.

    See, since the 1970s, the value of most currencies have "floated" - i.e. their value is not backed by anything valuable (usually a specific amount of gold), but change value based on how in demand those currencies are by foreign buyers.

    If an economy is growing, more foreign investors are likely to want to buy the currency as it provides a better return. In the way supply and demand usually works, this means that each unit of currency is more in demand, and therefore worth more. If an economy is failing, investors seek to sell their reserves, and the value of the currency falls.

    We can see this happening to the day with Brexit and the value of the pound; After the Brexit vote, the value of the pound dropped dramatically. While it recovered a little bit once the dust settled, overall, the country's economic future is uncertain, and the value of the pound is still gradually falling as investors are wary of putting their money into the UK when it's economic future isn't looking so great.

    This value affects how much the currency can buy of items sold in other countries - if we want to import something and we have a strong currency, it will cost us less, while if our currency loses value, importing will cost more. This has a lot of knock-on effects if what you're importing is vital to your economy - oil, or food, for example - so if your currency is worth less, it costs more to go bout your daily business, and cost of living increases. Which means, in order to stop standards of living from dropping, average wages have to rise alongside it.

    But of course, those wage rises have to be paid for somehow, and so prices tend to rise as well.

    It''s all a very fine balancing act, and it's all very, very boring.
     
    Banananarchiste likes this.
  8. GingerCoffee

    GingerCoffee Web Surfer Girl Contributor

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    You can roughly just cut all of today's prices and earnings in half. I would think that will be close enough for a novel..

    Wiki - Inflation has a basic explanation for why prices and wages drift upward most of the time.
     
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  9. Banananarchiste

    Banananarchiste Member

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    Great thank you very much!
     
    GingerCoffee likes this.

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