You might have heard that nowadays workers want flexibility or jobs with a sense of purpose. But with inflation on the rise, something far more basic is getting attention: cost of living wage adjustments, or raises that keep up with actual inflation, Emily writes.

Why it matters: Though wages have risen substantially over the past year, on average they're not keeping pace with inflation. Whether that's a good or a bad thing kind of depends on where you sit in the worker food chain, and on your economic outlook.

• Unions — and other workers — are increasingly looking for cost of living raises and protections.
• Once common in contracts back in the inflation-soaked 1970s, these provisions lost favor as labor's power diminished and inflation ceased to be as much of a concern while rising health care costs gained attention, says Todd Vachon, a professor of labor studies at Rutgers University.

Now: "There is increased interest in getting COLA provisions back in many contracts," Ray Curry, the president of the United Auto Workers, which represents nearly 400,000 workers, tells Axios.

• Case in point: At the end of 2021, John Deere UAW members signed a six-year agreement that locked in such adjustments.

State of play: Inflation over the last year is 8.6%, according to the Consumer Price Index. Wage growth was 6.1%, according to the Atlanta Fed's wage tracker — a closely followed data source. For workers with a college degree, it was 5.4%.

• Meanwhile, real (inflation-adjusted) average hourly earnings are back where they were at the start of the pandemic (check out the chart below).

Zoom out: A few months ago, economists and policymakers were freaking out over the possibility of a wage-price spiral, in which rising wages drive prices higher, a vicious cycle that sends inflation out of control.

• That hasn't happened, in part because of the diminished power of unions — and also, partly, because of the fast-changing nature of the economy. Just a month ago, economists were (wrongly) saying inflation peaked, notes Nela Richardson, chief economist at payroll firm ADP.
• "Wage growth is responding to what’s already happened to inflation and productivity. This isn’t the beginning of a wage-price spiral, " Jean Boivin, head of BlackRock Investment Institute, tells Axios.

And some nonunion companies are giving COLAs a whirl. Back in February, all nonexecutive employees at Crunchbase learned they'd get a 7% raise, around the inflation rate at the time, purely to keep pace with price increases.

• This was outside of their regular review and promotion cycle, says Matt Schulman, a communications manager at the company. He got another raise soon after. "It was pretty awesome."

The bottom line: "Wage growth is an element of inflation, but it's not one of the key drivers right now," says ADP's Richardson.

Here's some perspective on the tight labor market: Once you adjust wage data for inflation, workers in the U.S. don't seem to have made much progress since the before-times, Emily writes.

American workers earned $31.95 on average, in real terms in May 2022 — basically, the same as they were making right before COVID (h/t Axios chief financial correspondent Felix Salmon for doing the calculations).

Of note: The spike in earnings you see in the chart happened in April 2020 when millions of mostly lower-paid workers lost their jobs, changing the overall composition of the workforce. Those who held on to employment were higher-earners.

🛢 Biden warns Big Oil over gas output. (Axios)

💶 ECB holds emergency meeting to discuss market turmoil. (FT)

🏠 U.S. home equity hits record $27.8 trillion. (WSJ)

Yields on U.S. government bonds — known as Treasuries — rocketed in recent days, as Friday's inflation report convinced many that a combination of persistently high inflation and aggressive Federal Reserve interest hikes, is on the way, Matt writes.

Driving the news: The yield on the 10-year Treasury note surged to nearly 3.50% in recent days, a level not seen since 2011.

Why it matters: The yield on the benchmark 10-year note is the most important number in financial markets, and arguably the world.

• It's the foundation that investors worldwide use to build the models that determine the interest rates that borrowers — from home buyers locking in a mortgage to Fortune 500 companies placing multibillion-dollar bond deals — should pay.
• That means it's a quick-and-dirty way to assess the cost of borrowing in an economy.

When Treasury yields rise, almost everybody else pays more — sometimes a lot more.

• One example: Rates on 30-year fixed-rate mortgages surged to over 6% on Tuesday — from 3.16% six months ago — worsening an already dismal affordability picture for would-be homebuyers.

The bottom line: Add this to the growing list of ominous signs for the U.S. economy ... The Fed's trying to slow things down, without tipping the economy into an outright recession — but that's looking like a tougher path to walk lately.

"Wall Street indexes predicted nine out of the last five recessions! And its mistakes were beauties."

Why it matters: It's a reminder that the stock market's moves are often at odds with the underlying economic fundamentals.

• Yes, but: As we've said before, the stock market isn't the only indicator flashing warnings.