There are a number of factors that have an influence on the labour market, and by connection the income and wages in a given country. Chief among them is supply and demand. When there is a large supply of willing workers’ wages can remain stagnant since employers don’t need to raise wages to provide an incentive to attract workers. Conversely when the supply of workers is low and demand is high wages and income can rise rapidly. This can also lead to price inflation, which can cause central banks to raise interest rates, stifling economic growth.