Financial TimesFinancial Times

Global economy: Will higher wages prolong inflation?

By Delphine Strauss

01 Mar 2023 · 9 min read

Editor's Note

Workers are demanding better pay because of high inflation. But that comes with economic downsides. Central bankers worry that wage inflation will continue to drive price inflation. The FT reports.

More than 340,000 Americans will see an increase in their monthly pay cheque tomorrow after Walmart, the biggest private-sector employer in the US, raised its minimum hourly wage to $14. The retailer’s move will in effect set a new floor for pay in many US states.

On the other side of the Atlantic, as many as half a million UK public sector workers have taken industrial action over pay and Germany’s public sector unions are also calling strikes. In Hungary and Poland, wage growth has reached double digits.

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