Wage Flexibility

Wage Flexibility

The extent to which wages and salaries can rise or fall due to rising or falling profits. That is, a company or economy has wage flexibility if, when times are good, it provides employees raises but has the ability to impose cuts when times are difficult. Proponents of wage flexibility contend that it leads to lower unemployment because employers can cut wages instead of jobs. Critics, however, contend that it leads to lower financial security among workers.
References in periodicals archive ?
their findings point to greater wage flexibility in the United Kingdom as being one of the key factors in explaining the weakness of productivity since the financial crisis.
To determine more systematically whether the usual intuition that wage rigidities undermine efficiency is correct, or whether our earlier results are more reliable, we analyze more thoroughly the interdependency of wage flexibility and employment duration.
In particular, there have been no major institutional changes in order to promote numerical or wage flexibility in Germany.
Nevertheless, he sees indexation as a major source of inflationary difficulties, and endorses attempts by 1980s Boards to introduce a degree of wage flexibility, even while recognising the need for a living minimum.
The steps include budget cuts, tax reform, central controls on health spending, improved laws on wage flexibility and easier rules for foreign investment.
They also want the Bank of Greece to complete its assessment of Greek banks' capital shortfall and they expect the government to enact legslation to improve wage flexibility and further liberalise product and service markets, the document says.
states to operate with a single currency: labor mobility, wage flexibility, and a central fiscal authority.
To be on the safe side, host countries often try to limit immigration to skilled workers, because they join segments of the labor market in which sufficient downward wage flexibility provides immigrants with additional jobs.
Massachusetts Institute of Technology professor Olivier Blanchard offered several reasons why the economy may have become more oil-proof, saying in a research paper produced with fellow economist Jordi Gali earlier this year that better monetary policy, more efficient use of oil in rich countries and greater wage flexibility have all helped.
Chapters provide an overview of general labor market trends; present current demographic trends and forecasts; review recent discussions of labor market flexibility and flexicurity in the Baltic states; and analyze aspects of labor market flexibility on the micro level--labor flows between states, occupational mobility, and job destruction and creation--and on the macro level--employment protection legislation, the role of trade unions, and wage flexibility and efficiency of labor policies.
If anything, the euro is guilty only of exacerbating what was already wrong with Italy: a restrictive bureaucracy, a cartel-dominated economy, a lack of wage flexibility due to unions, and a poor infrastructure for trade.
The Interaction of Labor Markets and Inflation: Analysis of Micro Data from the International Wage Flexibility Project"