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 ?
Labor mobility and relative wage flexibility in parts of the segmented labour market provide adjustment means from a political economy perspective.
Peter Blair Henry and Conrad Miller (2009) note, for example, that in addition to exchange rate policy, the existence of growth-facilitating policies, fiscal discipline, openness to trade, and wage flexibility were important determinants of the superior performance of some of the fixed exchange rate countries in the region.
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.
Wage flexibility has played a role, albeit somewhat limited, in facilitating the labour market adjustment since the onset of the crisis, with a substantial proportion of the reduction in the wage bill achieved by cutting employment.
This and improved wage flexibility are helping to restore the competitiveness of the Greek economy.
Most members of Congep operate in Regions 3, 4A, 4B, and 7, where Congep is discussing possible wage flexibility with the Department of Labor and Employment (DOLE).
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.