... Kudlow said the president believed that the Fed was fundamentally flawed in its view that at some point very low unemployment will lead to higher inflation.
That idea "has been disproven for decades," he said. "We believe more people working and succeeding does not cause inflation." [Source]
The Phillips Curve states that higher employment leads to wage pressures which leads to price inflation. We haven't seen that not because the chain reaction never exists but because those in positions of power have done everything they can to suppress wage gains.
First, many women were encouraged to enter the labor force as part of the women's liberation movement or feminism. I was all for women having that freedom. However, we were told at the time that family incomes would double. They didn't. Men were simply paid less. I'm still for equal pay for equal work, though.
Second, millions of American high-paying blue-collar jobs were off shored. We were told that it would help our environment, that service jobs, especially financial, would make up for it all. It didn't happen. The world is actually more polluted because of it. We should have held our jobs and improved our manufacturing to eliminate the pollution. We should have held out for equal standards in other countries before allowing US companies to employ cheaper labor overseas.
Third, we suffered the Great Recession, which made workers fearful to ask for raises. Those workers know that employers will not give raises easily because those employers know that there is still plenty of labor slack and that they can spend money on more and more automation.
Fourth, we allowed for the creation of the gigantic student-loan industry. Young people can't afford to take the chances with unemployment they used to when demanding higher wages.
Fifth, Ronald Reagan smashed unionism. Collective bargaining, while far from a panacea, did help wage increases match productivity increases.
Sixth, personal and corporate taxes were slashed, which allowed the rich to spend more money on solidifying their control over politics and legislation and their control over the economy and regulations, etc.
I could go on, but you get the point.