Workers are not to blame for high inflation

Is it scapegoating or just more ineptness?

Blaming workers receiving higher pay for inflation is wrong, and shows a lack of understanding around the primary mechanism in which price rises eventuate. Instead of driving today’s high inflation, workers are suffering from it, desperately trying to keep their heads above water, as the waves grow higher, and the current gets more vicious. This can clearly be seen in the actual data, with total compensation significantly lagging the increase in inflation as measured by the CPI (Figure 1).

Instead of wages driving inflation higher, the same thing that has driven inflation higher, is driving wages higher.

It all boils down to the extreme post-COVID increase in the money supply

That thing has been the extreme surge in the money supply that occurred in response to COVID-19 (COVID). Just how extreme? In the US, the annual average increase in the money supply in 2020 was the second highest in its post-Civil War history! This was followed up by another extreme rise in 2021 (Figure 2).