Inflation refers to a state of rise in the general price level.
Wage and Salaried Class or Fixed Income Group : Fixed income group (which include wage and salary earners, pensioners) suffer during inflation. It is due to the reason that wages and salaries do not increase in the same proportion in which the prices or the cost of living rises. But those workers and employees who have formed strong trade unions stand to lose less in comparison to those who are not organised. Due to inflation, purchasing power of money falls. As a result of it, fixed income earners tend to buy less amount of goods and services than before even when there is a little rise in their wages.