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Wages are rising, but so are consumer prices. Is this a wage-price spiral?

Naomi Ludlow | USA TODAY | Nov 11th, 2021
Category: Financial News

When inflation rates in the U.S. hit a 31-year high, as the government reported on Wednesday, another concern quickly emerged among observers: the wage-price spiral.

 The forces at work are clear to anyone who's shopped recently. 

Rising commodity costs, supply chain snarls and labor shortages are forcing Americans to pay more for items from meat to gasoline. Earlier this year, prices for corn, grain and soybeans we3 at their highest levels since 2012. More expensive commodities, such as polyethylene and wood pulp, have translated into higher consumer prices for toilet paper, diapers and most products sold in plastic containers.

As a result, employees are demanding higher wages to provide their families with everyday supplies. 

And as employers pay for higher labor costs, business prices will rise.

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