Wages are the prices that workers receive for their labour in the form of bonuses, salaries or royalties. There are various factors that affect the wages. Two of the most important factors are discussed below.
Labour Unions –Labour unions are the one that affects the wages to a great extent by influencing and regulating the supply of the labour. The labour unions go to strike if their decision is not accepted for higher wages. The union’s influence is heavily on the employees and hence in lack of supply of the labour the company increases the wages . This is one of the important factors that affect the wages.
Supply and Demand – Supply and demand is the main factor as well to affect the wages. The more demand of the service leads to more wages. For example, in the current trend there is huge demand of artificial intelligence experts that means the wages for such labours or engineers are much higher than any other expertise right now. Though of high demand, there is less supply. Hence this proves that more the demand less the supply which makes the wages increase significantly .
These above factors indicate that the effect on wages depends on the circumstances. There are also many other factors that impact on the wages but these two above as mentioned are more critical factors that affects the wages to greater extent in comparison to the other factors.