Inflation doesn't exist as a policy to stiff wage earners. Inflation exists as a reality of a growing economy (more goods and services needs more money to cover them). The alternative is deflation, which would be extremely bad. So what we aim for, is low inflation. Which we've had for ~40 years. Low, controlled inflation is the vastly preferable alternative to any amount of deflation, so it's the side of the scale we target, giving a ~2% margin of error (~2% is the inflation level usually targeted by modern central banks).
What Krugman is talking about is that cutting wages is extremely hard for employers to do. Nobody wants to take a paycut. So what employers do instead, being put in the situation of needing to cut payroll, is eliminate entire positions. Which on the whole is worse than a paycut because of the destabilizing effect to the individual and society. So a positive side effect of inflation (not the main effect, a side effect), is that in the absence of pay raises, low inflation creates a constant mild paycut unless there is specifically a pay raise. It makes the economy more resilient.
What Krugman is talking about is that cutting wages is extremely hard for employers to do. Nobody wants to take a paycut. So what employers do instead, being put in the situation of needing to cut payroll, is eliminate entire positions. Which on the whole is worse than a paycut because of the destabilizing effect to the individual and society. So a positive side effect of inflation (not the main effect, a side effect), is that in the absence of pay raises, low inflation creates a constant mild paycut unless there is specifically a pay raise. It makes the economy more resilient.