The Gift of the Magi Questions and Answers
by O. Henry

The Gift of the Magi book cover
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What happened to Jim's weekly salary in "The Gift of the Magi"?

In "The Gift of the Magi," Jim Young's weekly salary has been cut by a third, from thirty dollars a week to just twenty dollars a week. This compels the young couple to get creative when each partner wants to purchase a beautiful Christmas gift for the other.

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Jim's weekly salary has been reduced by a third. He used to make thirty dollars a week, but that income "was shrunk" to twenty dollars. There is no indication that Jim did anything wrong that resulted in a reduction in his salary, so perhaps something happened with the business for which he works, and they were forced to cut workers' salaries in order to stay afloat.

It is entirely possible that some kind of economic recession compelled the business managers or owners to cut wages. A thirty-three-percent reduction in wages is a huge pay cut, and so it seems to have forced the young couple to reevaluate their position in the world. They must have felt they were on the way up when they put Jim's middle name—Dillingham—on their mailbox, but they've apparently been considering using just his middle initial as a result of their reduction in circumstances.

It is likely for this reason that neither Jim nor Della has been able to save up enough money to purchase a really nice Christmas gift for the other. Della, we know, has been diligently saving every penny and has only managed to scrape together one dollar and eighty-seven cents. The fact that the gold chain she buys for Jim costs around twenty-five dollars tells us just how much money ten dollars a week would buy at the time.

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