[saas_co_de]

The myth of the link between rising wages and inflation is very common in the media, but there is hardly any connection in reality.

Wages will naturally adjust to the equilibrium supply and demand. If the needed increase in wages to increase production pushes prices up such that supply falls then production will be cut to adjust. That is what actual economic theory says.

In the real world their is a lot of lag, so some market participants will be increasing wages and producing too much, and then they lose money, and have to overcut on the other side, but in a massive diverse economy this random noise balances out.

The market will never over price labor, therefore inflation cannot come from increasing wages.

Inflation comes from printing money (or creating it digitally since we don't actually print any more). When the inflation from printing money results in rising wages, then that is a sign to the bankers that they should cut back so that they can keep the poor in line, and keep them from paying off their loans so that they can't get out of debt.

Real world economics.

[tonyedgecombe]

Yes, I was thinking about the comment "a trillion dollars printed by the Fed" when I posted my reply.