>Consider: You are spending 90% of your wages on day to day expenses and there is 2% targetted inflation. You have lost a whopping ~20% of your margin of survival (100%-90% == 10% -> 100% - 91.8% ~ 8%). If you are spending 20% of your wages on day to day expenses and there is 2% targetted inflation, you have lost closer to 2% of your margin of survival. It's much easier to find lifestyle changes or, more likely, shift your investment balances that will keep you prospering in the "wealthy" situation.
Where do you think does the price rise come from? From magic pixie dust? It has to come from somewhere and since every service and good is the product of human labor that means any cost increase must derive from the scarcity of labor and thus increased income for workers.
In the past 5 years the US was one of the few countries that actually hit its 2% target inflation rate and guess what? It was one of the fastest growing first world economies both in terms of GDP and income for workers. It did not suffer because of the targeted inflation, it flourished because of it. The worst effects of inflation happen way beyond 5% and no country on earth wants that type of inflation. 2% is the best compromise between stability and change and it will always stay that way.
>And, before you say "wages keep up". No they don't, otherwise the policy of using inflation to prop up employment doesn't work via the policy mechanism. Definitionally.
Wages actually can't not keep up because by definition inflation happens when demand exceeds supply. Demand for consumer goods is by definition demand for the productive output of a worker. Buying that consumer good is directly paying the wage of a worker. If worker salaries consistently lag behind consumer price inflation then a competitor can just hire the cheap labor and undercut the incumbents and thereby reduce unemployment caused by "insufficient greed". I want to clarify that when I am talking about consumer inflation I am talking about demand side inflation.
Increased wages kill relative wealth and therefore for the wealthy the best thing that could happen for them is low consumer inflation or even deflation. Inflation forces them to actually invest their wealth to keep up with inflation and that investment must employ workers or otherwise it would not catch up with inflation. With deflation they don't need to do anything. You will get poorer every year automatically.
Economics is purely about setting the right incentives. Once you have set up the right system human greed alone will drive the economy to do the right thing. Unfortunately people hate greed because it screwed them, so they hate it even more when it doesn't screw them because that ruins their sense of justice (greed is always evil).