Labor market policies erode worker power, kill Phillips curve, boost profits.
The Phillips curve, a tool used to predict inflation, may have been killed by changes in labor market policies, not just by good monetary policy. When trade unions have less power, inflation is more stable, even without changing how money is managed. As worker bargaining power decreases, companies make more profit and workers get less. This shift in power explains why workers are getting a smaller share of the money made.