Rich people have no reason to keep significant amounts of currency while poor people have fewer options. Workers must also actively negotiate for higher wages while the value of their wage is passively going down.
> Rich people have no reason to keep significant amounts of currency
Eliminate inflation and they do though (if your currency is guaranteed to hold or even increase its purchasing power, the risk adjusted returns on investing it in productive activies aren't very attractive). Which is bad news for workers who feel they could be productive enough to negotiate for higher wages, if only the rich had any incentive to direct their gold reserves towards creating better jobs.
People can (and do) invest in gold right now. Nothing would change significantly for rich people as they would continue to put most of their money in the same investments they do today which generally have higher risk adjusted returns than gold and would continue to have higher risk adjusted returns than a gold backed currency.
The difference would be in the liquid portion of a person's assets and poor people need to hold a much larger part of their assets as cash and are therefore much more affected by inflation.
It should also be noted that neither fiat currencies nor currencies backed by precious metals are guaranteed to maintain their value and are usually not the most secure means of long term wealth storage.
> It should also be noted that neither fiat currencies nor currencies backed by precious metals are guaranteed to maintain their value and are usually not the most secure means of long term wealth storage.
The promise of an absence of inflation (which I agree is not the same as a gold-backed currency; moderate price inflation took place throughout the Bretton Woods era) is a guarantee that currency will hold its's value; that's tautological. Which obviously isn't the case for people speculating on timing the market for gold. And taking away the ability for prices on average to rise reduces the yield and increases the risk on investments in production or extension of credit. If you make currency an attractive component of rich people's portfolios, you decrease the proportion of their wealth invested in the wider economy (and since achieving zero inflation means artificially maintaining these rich people's purchasing power, if they scale back their investments everyone else just has to work harder for less...). Which is why an absence of inflation isn't a good thing for workers.
> moderate price inflation took place throughout the Bretton Woods era
Bretton Woods collapsed because the United States' gold reserves were depleted in half honoring the $35 then $41 fixed exchange. Too many dollars were printed during Bretton Woods to fund the Great Society and Vietnam war. Ending the system made sense because it enabled the United States to keep what was left of its Gold reserves.
Wages and prices don't go up in tandem. Wages typically lag.
Let's say there was 10% inflation instantaneously today. Everything costs 10% more starting today. When does my paycheck increase? Not today. Probably not next pay period. Either when I get my annual cost of living increase, or when I can negotiate it to happen, or when my boss decides that the company really needs to take care of me. Whichever way it happens, it happens later.
