Higher unemployment suppresses wages and dampens inflation.

Evidence

In 1957, the economist William Phillips empirically observed a negative correlation between the unemployment rate and nominal wages: the higher the number of unemployed, the lower wages would be. Over time, the curve that bears his name has evolved to also capture a negative correlation between the number of unemployed and price stability. In other words, the higher the rate of unemployment, the less prices will increase, and therefore inflation will be lower. — Clara E. Mattei, Escape from Capitalism, 271

Categorization

• DEFINE: Establishes the Phillips curve’s technical content before Mattei unveils its political meaning.
• XREF: connects to: Export-led growth structurally demands wage suppression and anti-inflationary monetary dominance — Mark Blyth, Austerity: The History of a Dangerous…, 368; Unemployment functioned as a deliberate political weapon to weaken labor — Clara E. Mattei, The Capital Order: How Economists…, 994; Pound revaluation in the 1920s forced down wages through mass unemployment — Clara E. Mattei, The Capital Order: How Economists…, 1683 (+3 more)