Let’s move from rear-view to the windshield on wage data
SummaryThe role of wages in a modern economy is complex—sometimes even contradictory
The role of wages in a modern economy is complex—sometimes even contradictory. Higher wages support consumer demand by strengthening the purchasing power of employees. They also fuel inflation by adding to business costs that are often passed on to consumers. That is not all. The level of wages is an important indicator of the quality of jobs available to citizens. They also provide useful insights about poverty trends in any country. And the relative movement in wages and profits give us information on how the growth of national income is being distributed, which is important for understanding both macroeconomic dynamics as well as inclusion.