...Inflation eases the sticky wage problem: You hold wages constant, and let inflation eat away the real value of the compensation until it’s in line with the company’s newly reduced expectations. It’s better for morale than an outright pay cut, and kinder than firing your least-productive workers.
With inflation so low, this takes a long time, but over the last seven years, workers who got no raises will have seen an average 10 percent decrease in the buying power of their salaries. Many workers have gotten raises to keep up with inflation, of course, which is why real compensation is roughly flat. But some people, possibly many people, have seen a real and substantial decline. And since we had so much inflation in sectors that you really don’t have much choice about consuming, like food and gas, that hurts....I think she hits on one of the reasons for general discontent about the economy. It's also relevant to the ChemCensus and how folks are feeling about their wages.