Question

In light of fluctuating inflation rates, a technology company adds a cost-of-living adjustment clause in its labor

contracts. How does this clause benefit employees?
Multiple Choice
It calls for automatic wage decreases during periods of recession.
It calls for employers to fulfill the self-actualization needs of employees.
It calls for employers to provide safe working conditions for employees.
It calls for automatic wage increases during periods of inflation.

Answer 1

The cost-of-living adjustment clause in labor contracts benefits employees by calling for automatic wage increases during periods of inflation.

Step-by-step explanation:

The cost-of-living adjustment clause in the labor contracts benefits employees by calling for automatic wage increases during periods of inflation.

This means that when inflation rates rise, the employees' wages are adjusted to maintain their purchasing power and keep up with the increased cost of living.

For example, if the inflation rate is 3%, an employee earning $50,000 would receive a 3% raise, increasing their salary to $51,500.

Learn more about benefits of cost-of-living adjustment clause in labor contracts