Purchasing power of wages


Dernière mise à jour le :13/10/2016


The purchasing power of wages is the quantity of goods and services that can be bought with a wage unit. Its evolution is linked to that of prices and salaries.

Therefore, if prices increase in an environment where wages are constant, there is a drop in purchasing power whereas if the increase in wages is greater than that of prices purchasing power may increase.

The notion adopted here is the wage, but the reasoning applies to all resources (work, capital, family and social benefits, etc.).