Across the world, wage growth has been plateauing and even declining in some nations, which has been a good indicator that inflation may decline without causing a subsequent increase in unemployment. However, the stagnant wage growth presents a significant constraint on workers' purchasing power. One of the reasons that wages have not kept pace with rising inflation is because wages change more slowly compared to prices, as changes in compensation often involve negotiations that take weeks or months. Additionally, the number of workers seeking jobs has risen close to pre-pandemic levels as inflation has eroded many people's pandemic savings. However, there is some optimism that real wages may recover if unemployment stays low enough to preserve workers' bargaining power.
See "Wage growth across the world has not kept pace with inflation, eroding workers' real wages", Tom Fairless, Wall Street Journal, February 20, 2023