Can you explain the impact of wage freeze?

Answer by  tamarawilhite (17883)

A wage freeze states that wages cannot go up. This is usually the result of government attempting to fight inflation. If inflation continues to rise, businesses either compensate by increasing benefits or offering bonuses and incentives, since employees cannot live on the lower wage against rising prices.

Answer by  Turkwork (1150)

A wage freeze is usually a temporary cost saving measure that companies use when a company is having difficulties. There are several ways that a wage freeze can impact a company. It definitely saves money but it can affect employee morale and productivity. It can also cause employees to have concern about the companies future.

Answer by  skippy (16)

Wage freezes impact more than the bottom line. The biggest hit is to employee morale. After the initial shock, employees will waste time complaining about the lack of an increase in salary. They will also slow production down in order to compensate in their minds for their mistreatment. Wage freezes rarely help in the long run.

Answer by  conjcm (122)

The point of a wage freeze is to stem inflation. If a wage freeze is instituted but inflation keeps growing then worker purchasing power is greatly diminished. Most economists agree that wage freezes ultimately do not work as intended.