Wage Stabilization

Wage Stabilization

During a period of high inflation, the system of policies a government uses to prevent wages from increasing. A government may adopt a wage freeze, in which it simply forbids wage and salary increases. Because this does not attack underlying inflation, the most effective method of wage stabilization is to reduce currency in circulation, specifically by raising key interest rates.
References in periodicals archive ?
Inspectors of the Wage and Hour Division were assigned to explain, investigate, and enforce the wage stabilization program.
With the onset of World War II, the vast data needs generated by price controls and the wage stabilization effort led to the establishment of BLS regional offices to advise and assist regional War Labor Boards.
The information was also used to measure the effectiveness of wage stabilization decisions and to settle industrial disputes.
The wartime work on wage stabilization had established the value of area-oriented data, so, in 1948, a series of surveys measuring pay levels and related practices for office clerical occupations on a cross-industry basis was initiated in 11 large cities.
Although there was still substantial interest in broad economic indicators, the Urban Wage Rate Index was discontinued in 1947, when wage stabilization ended and budget cutbacks were imposed.
With the beginning of comprehensive wage stabilization under the War Labor Board, the governmental need for wage statistics increased manyfold.
This was an extraordinary achievement over a period of little more than 2 years, and represented a vital contribution to the wartime wage stabilization program.
The second Bureau contribution to the wage stabilization effort was the construction of an occupationally based index of urban wage rates.
For more than 3 years, almost all of the Bureau's expanded resources for wage survey purposes had been devoted to data needs for wage stabilization and labor dispute settlement.
As it happened, this exploratory work was coming to a close at the outbreak of the Korean War in June 1950, which called forth another wage stabilization effort.