[wpietri]

I think of it more as a workaround for a cognitive bias. Rational actors would be ok with wage cuts as their comparative advantage declines. But humans aren't rational actors, so we instead allow for a little inflation to make adjustment easier. Then people stay employed and productive.

I don't think the ruling class gives a shit about employment metrics. As we saw with the fashion for "austerity" in Europe, they were positively gleeful about other people's suffering. And no wonder; high unemployment reduces labor's bargaining advantage over capital, thereby increasing their relative power.