A factor that could influence an employer to increase an employee's wages is high worker productivity (second option).
Wages is the reward given to an employee for partaking in the production activities of a particular company. When wages are increased, it can either be to act as incentive to an employee or to reward the employee for an increase in productivity.
When there is an economic downturn, the profitability of a company usually reduces because there would be a low demand for the company's goods. Firms would want to conserve their profits, thus it is unlikely for them to increase employee's wages. Increase in insurance costs, increase the cost of production and reduces the company's profit. This reduces the incentive to raise employee's wages.
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