Wages As Well As Inflation

Marty Feldstein has a very interesting persuasion piece on Project Syndicate. His brain betoken is that micro distortions from social programs (and taxes, labor laws, regulations etc.) are leading many people non to work, in addition to is good stated.

An introductory paragraph poses a puzzle to me, however,

Consider this: Average hourly net inwards May were 2.3% higher than inwards May 2014; but, since the commencement of this year, hourly net are upwardly 3.3%, in addition to inwards May lone rose at a 3.8% charge per unit of measurement – a clear sign of amount employment. The acceleration began inwards 2013 every bit labor markets started to tighten. Average compensation per hr rose merely 1.1% from 2012 to 2013, but in addition to therefore increased at a 2.6% charge per unit of measurement from 2013 to 2014, in addition to at 3.3% inwards the maiden of all quarter of 2015.

These wage increases volition shortly present upwardly inwards higher toll inflation. 

This is a mutual storey I hear. However I listen to a greater extent than or less other storey besides -- the puzzle that the portion of working capital missive of the alphabet seems to accept increased, in addition to that existent reward accept non kept upwardly amongst productivity.

So, peradventure nosotros should cheer -- rising existent reward agency reward hold upwardly grab upwardly amongst productivity, in addition to create non signal inflation. The long-delayed "middle class" (real) wage ascent is here.

I'd live curious to listen opinions, amend informed than mine, nigh how to enjoin the ii stories apart.