[tbrownaw]

And empirical data suggests that that fight tends to be fairly successful, too. This is why deflation is poison for economic activity.

I suspect that demanding constantly increasing income would be rather less successful if the system weren't rigged to make expenses never decrease.

[nhaehnle]

The empirical data is not about constantly increasing income. It's about a number of things, but the most striking is that in a deflationary environment, wage (and other price) changes have an abnormally large peak at a change of zero; this peak does not fit into any simple assumption about how price changes should be distributed (in particular, it is clearly not a normally distributed effect).