Wages and Panic Buttons

[Max Sawicky]

>Also, some of the worst real wage declines in the U.S. were during 
>the high inflation years of the late 1970s. Some of the best recent 
>real wage gains have come during the last two years, a period of low 
>(and falling) inflation.

So, too in Britain. Inflation just drove down the real wage. 
------------------------------------------------------

One must distinguish between inflation resulting from
singular events like the oil price spikes, and that
observed in 'normal' economic periods.  The 70's
experience does not invalidate the proposition that
as a routine matter, higher inflation is associated
with higher wage and GDP growth.  The recent two-year
period in the U.S. is a welcome break, brief so far,
in a much more long-standing patter of wage stagnation.

Just comparing periods has its uses, but in statistical
terms it is equivalent to a model with one explanatory
variable (i.e., one is comparing GDP or wages to inflation
and ignoring other factors).

mbs