... and away from profits does not directly undercut cost-push inflation ... indeed, to the contrary, any reduction in real wages leads to more impetus to push for recouping the loss in higher nominal wages, and that tax shift is a reduction in real wage.

Its the maintenance of slack labor markets that is the key to suppressing nominal wage increases ... no matter what the impetus to push for recouping lost wages, in the context of the extraordinarily slack labor markets that the US has been experiencing ... U6 unemployment above 8% at what was supposed to be the "peak" of the business cycle! ... there's little for workers as a group to do but to take it on the chin.


I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.