Good Wage Increases – & Bad

Robert Samuelson, Investor’s Business Daily
WASHINGTON — Wages are among our most scrutinized economic indicators. It’s no secret why. We’d all like a pay raise. But there’s a second, less-recognized reason. Wages are considered a precursor to higher inflation. If they rise sharply, prices will follow. That’s the theory.It’s wrong — or at least dangerously incomplete.This matters now. The Federal Reserve is considering when — and how much — to raise short-term interest rates, which have been held near zero since late 2008. Any acceleration of wage gains could be taken as evidence of greater inflationary pressures and justification…