Mui: Economists and policymakers are making too much of the unit labor cost

“Claims about inflation rooted in unit labor cost arguments are trivial, tautological or unsupported by the data; they are the emperor that has no clothes,” 

Preston Mui earned his doctorate in economics from the University of California, Berkeley, just last year, but he’s already making waves. This month he called out some of the biggest names in economics and policymaking in a blog post.

Mui linked to two prominent Harvard economists, Lawrence Summers and Jason Furman,  and named Christine Lagarde

In a June 15 news conference, Lagarde cited unit labor costs five times.  

Similarly, Jerome Powell cited unit labor costs in the footnote of a 2021 speech, writing that “ultimately” a persistent rise in unit labor costs adjusted for inflation “will put upward pressure on prices.”

I asked some of the people whom Mui called out for their reaction.

Peter Coy NYT 17 July 2023

 

Mui blogg post

https://www.employamerica.org/blog/unit-labor-costs-do-not-drive-inflation-they-are-inflation/