GENERAL KNOWLEDGE

Detailed explanation-1: -Cost of living is tied to wages, as salary levels are measured against expenses required to maintain a basic standard of living throughout specific geographic regions.

Detailed explanation-2: -A national wage policy must aim at establishing wages “at the highest possible level, which the economic conditions of the country permit, and it also ensures that the wage-earner gets a fair share of the increased prosperity of the country as a whole resulting from economic development.”

Detailed explanation-3: -The term wage policy refers to legislation or government action undertaken to regulate the level or structure of wage, or both, for the purpose of achieving specific objectives of social and economic policy. A wage policy guides organizations in taking decisions on wage-related matters.

Detailed explanation-4: -So a rational wage policy must be able to furnish a standard of living and must be able to eliminate the relative poverty. Here it is important to clarify the concept of relative poverty. It refers to the relative share of income accruing to the working class.