Inflation, as indicated by the CPI or the consumer price index, is the main reason, why economies around the world have to re orient themselves to adjust to the rate of inflation in an optimum manner. Inflation impacts various segments of the economy. It also affects wages. Due to the following three factors, a sharp decline in the real wages has been observed in the labor market. There is a close relationship between inflation and wages. Inflation adjusted wages are the wages, which do not lose value even when there is inflation. It is a well known fact that with inflation, value of money decreases. But, in case of inflation adjusted wages, this does not happen. Inflation adjusted wages also known as middle class squeeze, has declined sharply in recent years.
Role of the unions:
A gap has been created between wages and savings. This in turn is a threat to the productivity of the economy of a country. The labor union is instrumental in helping the workers avail their rights with regard to wages. The unions have played an important role in deciding the wages of the workers. They have worked towards granting equality to the workers.
The unions play the following roles:
They enhance industrial democracy, thereby increasing productivity.
Establish a close association between production and payments.
They also provide training to the workers.
Take care of health coverage pertaining to the workers.
Pension benefit issues are also taken care of by the unions.
For global governance watchers, this was the big week of the year. Between 7 November and 16 November, the world witnessed an APEC meeting in Yanqi Lake near Beijing complete with a bilateral China–Japan ‘breakthrough’ and a major US–China climate deal; an historic ASEAN and East Asia Summit held in Naypidaw, Myanmar; and a colourful G20 meeting in Brisbane, Australia.
Notwithstanding the chorus of those announcing growing disorder, global order seems better off after these summits.
Nouriel Roubini, a.k.a. “Doctor Doom”, is chairman of Roubini Global Economics and professor of economics at New York University’s Stern School of Business. Roubini has been consistently cited as one of the world’s top global thinkers. This year, he was voted as the most influential economist in the world by Forbes magazine.
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Vice President and Director of the Global Economy and Development Program at the Brookings Institution. Former Turkish Minister of State for Economic Affairs. Head of the United Nations Development Program (UNDP) from 2005-2009.