2. Wage rigidity: Wage rigidity refers to the characteristic that wages are not easy to change (especially not easy to fall) after being determined, that is, wage elasticity is not enough. Wage rigidity is produced under the condition that employees' wages are not linked to their labor contributions and economic benefits of enterprises.
In the labor market, wages should be determined by the relationship between labor supply and demand, just like all other commodities. When there is a large demand for labor, wages will be high, and vice versa. When the demand curve moves to the left, wages cannot fall to the new equilibrium wage level, which is wage rigidity.
It is generally believed that trade unions, contracts and government minimum wage laws and regulations limit wage fluctuations. At the same time, company bosses don't like pay cuts, because pay cuts instead of firing inefficient employees will make excellent employees lose enthusiasm and even quit.
Once the salary grade is evaluated, it is relatively stable, and the salary cannot change frequently with the change of labor contribution and economic benefit; Wages can be increased or decreased, forming lifelong treatment.
The existence of this characteristic of wages makes it impossible for wages to give full play to the dynamic role of the distribution mechanism in the economic movement, loses its due economic leverage and stifles the vitality and vitality of economic development. Therefore, with the establishment of a planned commodity economic system, this feature should be gradually changed.