Raising wages can cause inflation, but that does not mean that any given increase causes any given bout of inflation. If capacity is idle for lack of workers, raising wages raises outputs, which lowers average costs and prices. In a supply shock, capacity is reduced, so raising wages just raises prices.

Pre-pandemic, the world was awash in capacity, and a case can be made that raising wages would simply have increased demand without stressing capacity. Thanks to the pandemic, we have gone from too many goods chasing too few dollars to just the opposite. The wage increase is one channel through which the supply shortage - including a shortage of labor - operates, but the idea that raising the minimum wage always causes inflation should be resisted.