We're definitely talking about nominal.

wing-_-nuts said 'with inflation rising at 6%, will the company reconsider their 'standard' 2% raise?'

It wouldn't make any sense to say that if the 2% raise was real.

So, the economically rational thing for everyone to do is to engage in this gigantic game of musical chairs, if they care about the number at the bottom of their paystub? That's silly, and a great way to throw away a lot of specialized domain knowledge.

There's a lot of value in playing musical chairs. The market is pretty good at allocating human labor. Some companies get left without people in the seats and others, often the more innovative companies end up with more than they had before.

A labor market with high liquidity leaves most people better off.

The labor market can go fuck itself if it doesn't serve the people, IMO. People aren't just for creating "value." They have lives. If the economy doesn't work for people, it just plain doesn't work. Not everybody wants to change jobs all the time. Those people don't deserve pay cuts for providing the same "value" they provided a year ago.