Rising wages do not cause inflation (“Raises for Job Switchers Heighten Inflation Risk”, Wall Street Journal, April 25, 2022, p. A1). Instead, rising wages are symptoms of rising inflation rates. When prices are—and people expect them to be—on an upward march, workers demand (and employers are willing to pay) higher cash wages in the attempt to maintain standards of living. To conclude otherwise is to confuse increases in the price of one good (labor) with an increase in the prices of all goods.
“Cost-push inflation” cannot be sustained without continuous increases in the money supply, which actually is responsible for today’s
