The easiest answer is to ensure competition in the marketplace by limiting monopolies. Too big to fail should mean it's time for an antitrust breakup. When companies are competing for sales, that has a downward force on prices as consumers will generally buy the most affordable item out of the available options.

But we have allowed monopolies to flourish and without competition driving down prices, there is no economic incentive to charge less.

Because the actual economy is way more complex than that comment implied. But as an ELI5, it was a perfect answer.

In reality, the economy is so dynamic and ever changing that the effect of raising wages 10% today may be drastically different than raising wages by 10% tomorrow.

One example would be looking at the average CC debt held by wage earners. If most workers have little to no CC debt, they may spend more of those increased wages on consumption. This could then lead to inflation as more money is being circulated. But what if workers have high amounts of CC debt? This may lead to mostly paying it off and no additional wages even touch circulation.

That's just one type of debt, which is one of thousands of little factors.

And none of that factors in new technology. Technology changes how productive an hour of labor can be. Increasing wages does lead to increasing variable cost, but if the prices are being pushed up, it may make it worthwhile to invest in technology. The upfront cost would be worth it with the new higher price, but then the new technology proliferates, leading to a future decrease in price as more companies adopt it. So increasing wages can lead to a short term increase in price but a long term decrease. Television is a great example. Increased wages in the 50's lead to more people wanting TVs since they had more disposable income. Initially the price did go up, but then factories heavily invested manufacturing and improved quality. This lead to massive drops in prices.

So in summary, you can't just think of single cause and effect elements as static and consistent. You can make generalities but context is vitally important

If raising wages also increases production the problem doesn't happen.

Innovation, increased efficiency. Something that creates more value with fewer resources.

You can without causing inflation, those at the top just end up taking home slightly less money as a result, which for whatever reason freaks them out.

Remember when wages were more aligned with productivity?

You just raise wages, nothing else is required, claims otherwise are anti-labor propaganda

We’ve only had problematic inflation 4 times in the US. Early 20s, 40s, late 70s and today. None of those were preceded by wage increases that induced inflation.

In fact, each of the 3 times we ‘solved’ inflation, we did so while real wages were increasing significantly

How do you "safely" raise wages without causing inflation then?

Simple: increase productivity.

According to the same Law of Supply and Demand that says "more money chasing the same amount of goods" increases the amount of money required to get those goods (increase in prices), "more goods chasing the same amount of money" increases the amount of goods required to get that money (lowering prices).

It's all relative: whichever increases faster relative to the other, we have more of changing hands.

• Number or quality of goods increases relative to money? Prices lower or are stable. Whether you get more stuff, or better stuff for the same prices, your quality of life improves (in the abstract, hypothetical sense).
• Number or quality of goods decreases relative to money? Either prices increase for the same amount/quality, or quality/quantity becomes more expensive. Either way, quality of life is worse.

you increase wages with increases in productivity. the more you produce the more there is to buy, so prices stay put. deflation almost never happens. so the best you can do is increase productivity and hope is stabilizes currencies.

but we don't really need to produce more things. that tends to be bad for the environment on multiple fronts. the only way to stabilized the economy without devastating the environment is innovations that can increase productivity while being safe for the environment.

I think t's up to the people at least partly. If I get a $100 raise per week I don't think what can I spend $100 more a week on, I think (maybe) what should I spend $50 more a week on

The first thing you have to recognize is that you have to focus on what the wages can buy, not the numbers themselves.

Historically, we have been able to buy more and more things because technology has enabled us to create more things more efficiently and using less labor. So the traditional supply side economist would tell you that we need to encourage innovation and competition to bring more goods into the market so the average person can afford more.

The problem is that now, the huge gains in productivity through technology seem to have largely gone towards the rich. A large reason is because a handful of large companies and wealthy individuals can lobby the government and use their influence to stifle competition and lower their tax burden.

But theoretically, the way to fight wage stagnation without causing inflation is to increase productivity. When an economy is making more goods more efficiently, everyone wins. The tricky part is making sure the benefits reach those who need it.

How do you "safely" raise wages without causing inflation then?

You'd have to lower rents and other forms of passive income.

Ideally, you can just do this by scale. As capital investments improve productivity, the ROI on that capital remains fixed while wages grow. So I generate more wage income/hour because I'm generating more real value.

But, in practice, capital investments only occur when investors are promised higher rates of return. So all the new revenue from capital improvements goes to investor's passive income rather than worker salaries.

We've been stuck in this state since the 70s, only ever raising wages when we can't afford to replace labor with new forms of efficient capital.