As the job market tightens, we may well see some increases in the pace of wage growth. I, and more importantly, millions of working people, certainly hope so. But predictably, pressure is building on the Federal Reserve to stomp out any such thing sooner than later, based on the fear that wage pressures will set off higher and higher rates of inflation.
Dean Baker and I think otherwise, and elaborate a number of reasons why this fear is a) not well-founded and b) poses a real threat to living standards. Over at PostEverything.