Economists are warning that America is in the midst of a wage-price spiral. It’s when workers demand increases in pay due to inflation, businesses respond, and then increase prices to pay for the outlay in new expenses. It’s a pattern that is continuing to repeat, and economists say it’s throwing the country into a wage-price spiral that could last for a long time and exacerbate inflation. The end result may be painful.
What is at the heart of the catch-22?
Next week, President Biden plans to tout his economic success. It may be too soon. Americans have lost significant money due to inflation, job losses are mounting, and trade imbalances are re-appearing. In the latest government data, warning alarms are sounding off. One metric is the worst it’s been since the Great Depression, and other indicators suggest we’re in for a bumpy ride.
Of course, Biden knows what’s coming. So, his public relations tour will try to head off his political troubles. He’ll deflect, blame, and rinse and repeat.
Will it work?
