| Share
 

wages

Introduction

wages, payment received by an employee in exchange for labor. It may be in goods or services but is customarily in money. The term in a broad sense refers to what is received in any way for labor, but wages usually refer to payments to workers who are paid by the hour, in contrast to a salary, which implies a more fixed and permanent form of income (e.g., payment by the month rather than by the hour). In economic theory, wages reckoned in money are called nominal wages, as distinguished from real wages, i.e., the amount of goods and services that the money will buy. Real wages depend on the price level, as well as on the nominal or money wages.

In the United States, wages increased fivefold between 1860 and 1960. Adjusted for inflation and expressed in 1982 dollars, the typical weekly wage of a U.S. worker increased from $262 in 1960 to $298 in 1970, but increased foreign competition and slower U.S. economic growth forced weekly wages down to $274 in 1980 and $255 in 1991. In the 1990s, U.S. wages grew very slowly, to $270 in 1998, despite record economic growth. In the United States and elsewhere, a "gender gap" often exists, in which women are paid less than men for comparable positions.

See also minimum wage.

Sections in this article:

The Columbia Electronic Encyclopedia, 6th ed. Copyright © 2012, Columbia University Press. All rights reserved.

See more Encyclopedia articles on: Economics: Terms and Concepts


24 X 7

Private Tutor

Click Here for Details
24 x 7 Tutor Availability
Unlimited Online Tutoring
1-on-1 Tutoring