What is one impact of inflation on industrial relations?

One significant impact of inflation on industrial relations is that wage demands may increase. When inflation occurs, the overall price level of goods and services rises, leading to a decrease in the purchasing power of money. As employees experience higher costs for basic necessities such as food, housing, and transportation, they often feel the pressure to seek higher wages to maintain their standard of living. This situation can prompt trade unions or workers to advocate for salary increases that align with or surpass inflation rates, thus creating discussions or negotiations between employers and employees. This dynamic can lead to tensions in industrial relations, highlighting the need for companies to respond to these demands appropriately to maintain morale and workforce stability.