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Wage means payment for units of time or units of product as valued under a wage rate agreement. Today's most common unit is the hour. Many governments impose minimum wage rates upon employers to protect society. (e.g. Michigan's current minimum wage rate is: $890 per hour) However, many employers offer employees significantly higher wage rates. (e.g. Michigan's current median hourly rate for a Certified Nurse Assistant (CNA) is $1240 per hour)
Wages means remuneration ([L. remuneratio: cf. F. rémunération.] "Act or fact of remunerating"; "to give, present" an "advantage", "gift" or "reward" ) for services (or the quality thereof). In addition to receiving a wage, employees are often "put upon wages" to provide an employment advantage. These advantages may include such things as health and life insurance, paid vacation time, gifts for years of service, bonuses for high production rates and other employer provided benefits.
Payment by wage contrasts with salaried work, in which the employer pays an arranged amount at steady intervals (such as a week or month) regardless of hours worked, with commission which conditions pay on individual performance, and with compensation based on the performance of the company as a whole. Waged employees may also receive tips or gratuity paid directly by clients and employee benefits which are non-monetary forms of compensation. Since wage labour is the predominant form of work, the term "wage" sometimes refers to all forms (or all monetary forms) of employee compensation.
- 1 Origins and necessary components
- 2 Determinants of wage rates
- 3 Wage & Wages in the United States
- 4 See also
- 5 References
- 6 Further reading
- 7 External links
Origins and necessary components
Wage labour involves the exchange of money for time spent at work (the latter quantity is termed labor power by Karl Marx and subsequent economists). As Moses I. Finley lays out the issue in The Ancient Economy:
- The very idea of wage-labour requires two difficult conceptual steps. First it requires the abstraction of a man's labour from both his person and the product of his work. When one purchases an object from an independent craftsman … one has not bought his labour but the object, which he had produced in his own time and under his own conditions of work. But when one hires labour, one purchases an abstraction, labour-power, which the purchaser then uses at a time and under conditions which he, the purchaser, not the "owner" of the labour-power, determines (and for which he normally pays after he has consumed it). Second, the wage labour system requires the establishment of a method of measuring the labour one has purchased, for purposes of payment, commonly by introducing a second abstraction, namely labour-time.
The wage is the monetary measure corresponding to the standard units of working time (or to a standard amount of accomplished work, defined as a piece rate). The earliest such unit of time, still frequently used, is the day of work. The invention of clocks coincided with the elaborating of subdivisions of time for work, of which the hour became the most common, underlying the concept of an hourly wage.
Determinants of wage rates
Depending on the structure and traditions of different economies around the world, wage rates will be influenced by market forces (supply and demand), legislation, and tradition. Market forces are perhaps more dominant in the United States, while tradition, social structure and seniority, perhaps play a greater role in Japan.
Even in countries where market forces primarily set wage rates, studies show that there are still differences in remuneration for work based on sex and race. For example, according to the U.S. Bureau of Labor Statistics, in 2007 women of all races made approximately 80% of the median wage of their male counterparts. This is likely due to the supply and demand for women in the market because of family obligations. Similarly, white men made about 84% the wage of Asian men, and black men 64%. These are overall averages and are not adjusted for the type, amount, and quality of work done.
Wage & Wages in the United States
Seventy-five million workers earned hourly wages in the United States in 2012, making up 59% of employees. In the United States, wages for most workers are set by market forces, or else by collective bargaining, where a labor union negotiates on the workers' behalf. The Fair Labor Standards Act establishes a minimum wage at the federal level that all states must abide by, among other provisions. Fourteen states and a number of cities have set their own minimum wage rates that are higher than the federal level. For certain federal or state government contacts, employers must pay the so-called prevailing wage as determined according to the Davis-Bacon Act or its state equivalent. Activists have undertaken to promote the idea of a living wage rate which account for living expenses and other basic necessities, setting the living wage rate much higher than current minimum wage laws require. The minimum wage rate is there to protect the well being of the working class.
Wages defined in U.S. federal taxation and withholding code
- Title 26 U.S.C. § 3401(a) ( INTERNAL REVENUE CODE) defines the term "wages" to mean remuneration for services.
- Title 42 U.S.C. CHAPTER 7, SUBCHAPTER II, § 409 (SOCIAL SECURITY) defines the term "wages" to mean remuneration for employment.
Wages defined in U.S. state taxation and withholding code
- MCL Chapter 206.6(2) (MICHIGAN INCOME TAX ACT OF 1967) defines the term "Compensation" to mean wages as defined in section 3401 and other payments as provided in section 3402 of the internal revenue code.
Wages defined in U.S. city taxation and withholding code
- MCL Chapter 141.604(2) (MICHIGAN CITY INCOME TAX ACT, Act 284 of 1964) defines the term "Compensation" to mean salary, pay or emolument given as compensation or wages for work done or services rendered, in cash or in kind, and includes but is not limited to the following: salaries, wages, bonuses, commissions, fees, tips, incentive payments, severance pay, vacation pay and sick pay.
- Compensation of employees
- Employee benefit (non-monetary compensation in exchange for labor)
- Labour economics
- List of countries by average wage
- Performance-related pay
- Wage labour
- Wage share
- Real wage
- List of sovereign states in Europe by net average wage
- Marginal factor cost
- Finley, Moses I. (1973). The ancient economy. Berkeley: University of California Press. p. 65. ISBN 9780520024366.
- Thompson, E. P. (1967). "Time, Work-Discipline, and Industrial Capitalism". Past and Present. 38: 56–97. doi:10.1093/past/38.1.56. JSTOR 649749.
- Dohrn-van Rossum, Gerhard,, (1996). History of the hour: Clocks and modern temporal orders. Thomas Dunlap (trans.). Chicago: University of Chicago Press. ISBN 9780226155104.
- Ezzamel, Mahmoud (July 2004). "Work Organization in the Middle Kingdom, Ancient Egypt". Organization. 11 (4): 497–537. doi:10.1177/1350508404044060. ISSN 1350-5084. Retrieved 2014-02-13.
- Finley, Moses I. (1973). The ancient economy. Berkeley: University of California Press. ISBN 9780520024366.
-  – Education 2020 Homeschool console, Vocabulary Assignment, definition entry for "wage rate" (may require login to view)
- Magnusson, Charlotta. "Why Is There A Gender Wage Gap According To Occupational Prestige?." Acta Sociologica (Sage Publications, Ltd.) 53.2 (2010): 99-117. Academic Search Complete. Web. 26 Feb. 2015.
- U.S. Bureau of Labor Statistics. "Earnings of Women and Men by Race and Ethnicity, 2007" Accessed June 29, 2012
- "Employees" as a category excludes all those who are self-employed, and this statistics only considers workers over the age of 16. U.S. Department of Labor. Bureau of Labor Statistics (2013-02-26), Characteristics of Minimum Wage Workers: 2012
- Tennant, Michael. "Minimum Wage The Ups & Downs." New American (08856540) 30.12 (2014): 10-16. Academic Search Complete. Web. 26 Feb. 2015.
- "U.S.C. Title 26 - INTERNAL REVENUE CODE". www.gpo.gov. Retrieved 2017-05-10.
- "U.S.C. Title 42 - THE PUBLIC HEALTH AND WELFARE". www.gpo.gov. Retrieved 2017-05-10.
- "Michigan Legislature - Section 206.6". www.legislature.mi.gov. Retrieved 2017-05-10.
- "Michigan Legislature - Section 141.604". www.legislature.mi.gov. Retrieved 2017-05-10.
- Galbraith, James Kenneth. Created Unequal: the Crisis in American Pay, in series, Twentieth Century Fund Book[s]. New York: Free Press, 1998. ISBN 0-684-84988-7
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- Lebergott, Stanley (2002). "Wages and Working Conditions". In David R. Henderson (ed.). Concise Encyclopedia of Economics (1st ed.). Library of Economics and Liberty. OCLC 317650570, 50016270, 163149563
- U.S. Bureau of Labor Statistics
- Wealth of Nations – click Chapter 8
- Understanding Capitalism Part III: Wages and Labor Markets – Critical of capitalism
- U.S. Department of Labor: Minimum Wage Laws – Different laws by State
- Average U.S. farm and non-farm wage
- LaborFair Resources – Link to Fair Labor Practices
- The Truth Behind Wages in Mining – How Wages are measured and Current Standards for Mining Professionals
- Database Central Europe – Data on average wages in Central Europe and in Emerging Markets
- Salary and wages data collection – Salary and wages data collection
- Prices and Wages library guide - Prices and Wages research guide at the University of Missouri libraries