Macroeconomics 11th Edition by Michael Parkin

Exercise 19

Use the following news clip to work Problem.
Getting a Raise: Why It's Not Happening
Didn't get a raise this yearBlame inflation. American wages didn't budge last month, according to Labor Department data released Wednesday. And with inflation remaining at near zero, experts say it could be quite a while before many workers see their next raise. While stagnant prices are a boon for consumers on supermarket checkout lines, they can be hard on workers' bottom lines. Wages typically track inflation, soaring higher when prices take off. In fact, some say wages tend to feed inflation. That was the case in the 1970s, when wage growth picked up after prices soared. But pricing pressures are weaker today, with the consumer price index, a measure of inflation, unchanged in July from the previous month.
a. Explain why the inflation rate and the rate at which wages rise are connected.
b. Explain in what type of inflation wages are "soaring higher when prices take off."