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Wage-Push Inflation |
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Wage-push inflation Inflation caused by skyrocketing wages. Wage-Push Inflation Inflation caused by increased costs as a result of higher wages. To give an extreme example, suppose a state raises its minimum wage from $5 per hour to $30 per hour. In order to be able to pay workers, an employer is forced to significantly increase the prices on his/her products. This in turn makes goods and services more expensive, and the $30 per hour suddenly lacks the purchasing power it had when the minimum wage was $5 per hour. Soon, it is no longer sufficient to purchase necessary goods and services and the minimum wage must be raised again. The cycle starts over, creating an inflation spiral. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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