[bhouser]

I think you're making a mathematical error here.

If inflation goes to zero, that does not mean prices have fallen to where they were before. It merely means prices stop increasing further.

So a temporary bout of inflation equal in magnitude to a one-time but persistent wage increase, _do_ cancel out.

[MilnerRoute]

Maybe I should swap in the word "price increases" for inflation.

Gas prices are high now, but nobody expects them to stay at this level indefinitely. (And nobody expects the price of gas to stop increasing without then also dropping back down.) Supply-chain related price increases aren't permanent, and go in the other direction when the supply chain improves.

And the larger point is it's a positive development if workers really are able to renegotiate their compensation -- and that isn't entirely negated by slightly higher prices in January.