This policy guarantees more or less permanent austerity and recession, because:-
Artificially deflating wages in this manner keeps inflation low. But, the things we need more money for, housing and fuel, are going up by many more times the official rate of inflation but are not included in the figures, so the official rate of inflation is meaningless.
Those who are the lowest paid spend the most as a percentage of their income. As their fuel and housing costs rise so much higher than their income the less economically active these people are going to be, leading to a decrease in sales OR an increase in the use of payday loans, leading to them having less to spend etc etc. So it's a vicious circle.
It's yet another proof that the wealth is being transferred ever more upward. How to stop it? Impose capitalism on the rich. Stop bailing them out, stop quantitative easing and allow the markets to decide which businesses survive.
AND PAY A DECENT LIVING WAGE YOU ROBBING BASTARDS.
If you want proof that even the rich think the current economic model is theft, Google Stanley Druckenmiller.