One of the popular suspects for causing inflation is that, in this tight labor market, workers are demanding higher wages and their increased disposable income (demand) is outpacing the supply of goods and services. Whenever demand grows at a faster rate, then supply prices rise.  A counter argument suggests that even though there does seem to be a shortage of workers in a number of industries, employers are still getting a bargain with their labor costs.  There are several measures one might enlist to argue this, but the simplest is said to compare the growth of wages with the inflation rate. Since April of 2021, inflation has averaged 4.2%, while wages across the economy have grown by just 3.2%. At present there appears no sign that the gap between income and the prices employers are receiving for their product is closing.The point being postulated is that wage growth has not been a driver of inflation, and in fact it has functioned as a moderating influence. That may change in the future, but this is something to keep in mind when one reads that the Federal Reserve Board is concerned about “structural inflation” – which is to say a spiral relationship between higher wages, leading to higher production costs, leading to higher prices, leading to demand for higher wages, and on and on.This argument, which may be supported by some data, is that workers don’t seem to be the cause of stubbornly persistent inflation, and that it’s the employers who are the real driving force.  Well, that’s the other side of the story. You be the judge.Disclosure Notice: The Wealth Conservatory® is a Registered Trade Mark of Comprehensive Planning Associates, Inc. - a Registered Investment Advisor with offices in New Hampshire, California, and Missouri. The Conservatory is not licensed to and does not engage in the practice of rendering legal or tax advice. Any discussion of either is for informational purposes only and you are strongly encouraged to seek appropriate counsel prior to taking action. The Conservatory and its representatives are in compliance with the current registration and notice filing requirements imposed upon SEC Registered Investment Advisors by those states in which the Conservatory maintains clients. The information contained herein should not be construed as personalized financial or investment advice unless the recipient has an executed and active client or member engagement with the Conservatory. The Wealth Conservatory® is a Registered Trademark of Comprehensive Planning Associates, Inc. Thank you.

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