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Employers would respond by raising prices to cover the labor costs, starting an inflationary spiral deemed to be more damaging than a rising unemployment rate. (See New York Times article.) meeting It's considered less damaging for a large group of people who want to meeting work to be sitting at home collecting unemployment than it is for corporations to make less money, so any time the Fed gets the least bit nervous about inflation, workers take the hit. Of course, some economists think this is bunk. James Glassman, senior meeting domestic economist at J. P. Morgan Chase & Company, says "This idea that wages are a signal of coming inflation is a bad habit. Business has control over labor costs more than ever in this global economy, as so many workers unfortunately are finding out." Some economists agree with him, and the Times article reports that there is some talk about bringing back full employment, or at least what we had in the late 90s, "when the economy boomed, the unemployment rate plummeted, wages rose faster than inflation across the work force and, lo and behold, inflation remained low, although the Fed still held down interest rates."
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