What is the price/wage spiral?
Price/wage spiral represents mutual dependence of prices of goods and services and wages. The price and wage of the spiral up, so neither higher prices nor higher wages economically benefit from a worker or companies that sell goods and services. The price/wage spiral is a type of inflation that results in higher prices and wages, but ends with every dollar spent or less evaluation. With a smaller number of trade unions in the US, the price/wage is less common. However, if this happens, it can affect all people and is particularly harmful to workers who are not. One can evaluate the price/wage spiral in the medical field as an example of how this form of inflation has a wide impact on the total population in the US.
follows a simplified example of the price/wage spiral: Rose health care costs and rising nurses are an example of price/wage spirals. Nearings tend to be organized to trade unions, are well compensated for their work. Rules in many countries increased the relationship of the nurse to pAcient and created a higher demand for nurses. This means that the hospital has to charge more because it has to pay more to the nurses, even if it should be noted that health care costs are influenced by more than nurses.
When hospitals charge more, insurance companies also. Workers from other trade unions then ask to increase wages to cover higher insurance costs. Once salaries increase in other fields, products produced, supplied or sold in these fields rise at the price. This is awarded to workers who are not experts who can find that their salaries no longer meet their cost of living or insurance costs.
Eventually, unorganized workers suffer the most prices/wage, because they may not have to negotiate the bargaining power. Their salaries are not ascended and what they earn is to buy them less. The price/wage of the Spiral leads to thisthat some workers are poorer because their dollars simply do not stretch.
Recession or government limits on the amounts that can be charged ends the price/wage. With increasing poverty among people who cannot increase, fewer things are purchased, leading to less demand. Less purchased goods or services can damage businesses to the extent that they start to reduce prices to get more sales. This may result in the wage of spiraling down.
The conditions for the price/wage spiral that affects the whole country must generally include highly organized workers, ie trade unions or their equivalent. In 2006/2007, economists observe the price/wage spirals in developing economies, such as Poland, and their analysis of these economies applies to examples of inflation in the past in the past in the US: Spiral's price/wage is a vicious cycle that tends to offer a very small advantage.