Wage Push Inflation Definition
An increase in the price of goods caused by an increase in wages give rise to a wage push inflation. Simply put, a wage push inflation is a type of inflation in costs of goods as a result of increase
Wage Push Inflation Definition
An increase in the price of goods caused by an increase in wages give rise to a wage push inflation. Simply put, a wage push inflation is a type of inflation in costs of goods as a result of increase in wages paid to workers. Once there is a rise in wages, a common trend that follows is an increase in the price of goods, this is to guarantee that the company still makes profit despite that money paid to workers has increased.
This increase in cost of goods is not limited to a specific product, it is general. When there is an increase in the prices of goods, it must be effected on wages.
A Little More on What is Wage Push Inflation
Higher wages are paid to workers for a number of reasons, the main goal of companies sis to make and maximizes profit, so they do not increase wages without any reason. Government decree and policy on minimum wage is one of the main reasons companies increase wages. An increase in wages translate to a rise in the price of goods, this is known as a wage push inflation. This type of inflation is not as a result of a general economic downturn, rather, it is the effect or a rise in wages.
Industry Factors Driving Wage Inflation
Increase to minimum wage in a country is not the only reason companies increase their wages. There are several industry fact