The phenomenon of wages in many industries changing very little or not at all for a year or more after a change in output is referred by economists as
A) wage lag effect.
B) wage stickiness.
C) compensation inflexibility.
D) inertia.
E) reservation wage effect.

Question

Quizplus · Accepted Answer

Wage stickiness is the phenomenon of wages changing very little or not at all for a year or more after a change in output. This occurs because workers are often resistant to accepting wage cuts and firms may be hesitant to reduce wages for fear of reducing worker morale and productivity.

The Phenomenon of Wages in Many Industries Changing Very Little