However a lack of liquidity in shares, or a languishing or reduction in share value can make employees wish they had opted for higher wages or another form of incentive compensation.

FORBES: Stock Options: A Strategic Weapon For Growth

That's why I've already proposed a new tax credit for more than 1 million small businesses that hire new workers or raise wages -- and a tax incentive for all businesses, large and small, to invest in new plants and equipment.

WHITEHOUSE: President Obama Holds a Town Hall in New Hampshire

But paying in-work benefits also creates an incentive for firms to cut wages, as the state's wage top-up will ensure their workers are no worse off.

ECONOMIST: Labour��s wage policy

In addition, in areas where temporary monopsony power arose and generated rents for employers it would provide firms with the incentive to locate there and bid up the below market wages until they reached the competitive level.

FORBES: How To Improve Immigrant Visas

Because the credits go mostly to people who earn wages and phase out slowly as income rises, they are a strong incentive to work.

FORBES: A Modest Proposal: Five Ways To Tax The 47 Percent

In addition, firms that are short of cash have an incentive, when negotiating pay, to promise improved pensions instead of higher wages.

ECONOMIST: American pensions