Allianz chief economic adviser Mohamed El-Erian said in an interview that the inflation problem in the United States will inevitably turn into a cost-of-living crisis as price pressures become broader, further erode the wage gains of many American households, and dent demand.
Wages have been on the rise as businesses boost pay to attract and retain badly-needed staff in the wake of the post-pandemic rebound in demand. But the higher pace of inflation has eroded those gains, pushing real wages—or those adjusted for inflation—into negative territory.
