Short- and Mid-Term View on the Purchasing Power of Employees Working in the Public and Private Sectors, Considering the Existence of a Minimum Wage and the Influence of Inflation

Abstract

The paper addresses the issue of employees' purchasing power, examining the minimum wage and taking the inflation rate into account. It considers an approach that uses a variable basis to evaluate employees' labor. The current situation is characterised by a lack of regular wage increases, resulting in a decline in real purchasing power due to inflation. The paper aims to determine how current practices can adapt to current influences and trends while increasing employee motivation and maintaining their real purchasing power. It also addresses how to achieve fairness and reduce uncertainty in the context of differing employee conditions. A wage indexation–based model has been created to solve this problem. This model solves the problem of decreasing purchasing power, thereby helping to achieve fairness and reduce uncertainty.