U.S. Faces Tough Scenario If Inflation Takes Off and Pay Doesn't
- Coke executive sees pricing power, but no broad wage gains
- Inflation is finally at the Fed’s goal, though pay has lagged
Photographer: Luke Sharrett/Bloomberg
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Prices and wages have been slow to accelerate throughout the U.S. economic expansion, surprising economists. Now, a new conundrum threatens to emerge: Faster inflation accompanied by more of the same paltry growth in pay.
“Broad-based wage gains, in our business at least, they’re just not going to happen,” Troy Taylor, chief executive officer at Coca-Cola Beverages Florida, said during a conference at the Federal Reserve Bank of Dallas last week. The company will pay for some skilled workers, but will otherwise increasingly turn to technology to fill its production needs, he said.