ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Wage Freeze is Not Appropriate

Wage Freeze is Not Appropriate Suresh Chandra Srivastava IT has been argued that a general moratorium on wage increases would help check the recession and the wage- price spiral. And the wage freeze should be accompanied by a dividend freeze to make it politically acceptable. These arguments show lack of understanding of the full implications of wage and dividend freeze. Restrictions on dividends are not really on par with the freezing of wages. A wage freeze implies, in effect, stabilisation of the money income of the wage-earner, whereas a dividend freeze implies a limitation only on current income from property. In other words, while a wage freeze confers no direct benefit in the future, a dividend freeze is nearly always compensated by an increase in the value of capital assets, and prospects of higher income in the future.

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