A wage is payment made by an

employer Employment is a relationship between two parties regulating the provision of paid labour services. Usually based on a contract, one party, the employer, which might be a corporation, a not-for-profit organization, a co-operative, or any ot ...

to an employee for

work Work may refer to: * Work (human activity), intentional activity people perform to support themselves, others, or the community ** Manual labour, physical work done by humans ** House work, housework, or homemaking ** Working animal, an ani ...

done in a specific period of time. Some examples of wage payments include compensatory payments such as ''

minimum wage A minimum wage is the lowest remuneration that employers can legally pay their employees—the price floor below which employees may not sell their labor. List of countries by minimum wage, Most countries had introduced minimum wage legislation b ...

'', ''

prevailing wage In United States government contracting, a prevailing wage is defined as the hourly wage, usual benefits and overtime, paid to the majority of workers, laborers, and mechanics within a particular area. This is usually the union wage. Prevailing ...

'', and ''yearly bonuses,'' and

remunerative Remuneration is the pay or other financial compensation provided in exchange for an employee's ''services performed'' (not to be confused with giving (away), or donating, or the act of providing to). Remuneration is one component of reward managem ...

payments such as ''prizes'' and ''tip payouts.'' Wages are part of the expenses that are involved in running a business. It is an obligation to the employee regardless of the profitability of the company. 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 In-Commission or commissioning may refer to: Business and contracting * Commission (remuneration), a form of payment to an agent for services rendered ** Commission (art), the purchase or the creation of a piece of art most often on behalf of anot ...

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 A gratuity (often called a tip) is a sum of money customarily given by a customer to certain service sector workers such as hospitality for the service they have performed, in addition to the basic price of the service. Tips and their amount ar ...

paid directly by clients and

employee benefits Employee benefits and benefits in kind (especially in British English), also called fringe benefits, perquisites, or perks, include various types of non-wage compensation provided to an employee by an employer in addition to their normal wage o ...

which are non-monetary forms of compensation. Since

wage labour Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under ...

is the predominant form of work, the term "wage" sometimes refers to all forms (or all monetary forms) of employee compensation.

Origins and necessary components

Wage labour Wage labour (also wage labor in American English), usually referred to as paid work, paid employment, or paid labour, refers to the socioeconomic relationship between a worker and an employer in which the worker sells their labour power under ...

involves the exchange of money for time spent at work. 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 Piece work or piecework is any type of employment in which a worker is paid a fixed piece rate for each unit produced or action performed, regardless of time. Context When paying a worker, employers can use various methods and combinations of m ...

). The earliest such unit of time, still frequently used, is the day of work. The invention of

clock A clock or chronometer is a device that measures and displays time. The clock is one of the oldest Invention, human inventions, meeting the need to measure intervals of time shorter than the natural units such as the day, the lunar month, a ...

s coincided with the elaborating of subdivisions of time for work, of which the

hour An hour (symbol: h; also abbreviated hr) is a unit of time historically reckoned as of a day and defined contemporarily as exactly 3,600 seconds ( SI). There are 60 minutes in an hour, and 24 hours in a day. The hour was initially establis ...

became the most common, underlying the concept of an hourly wage. Wages were paid in the Middle Kingdom of ancient Egypt,

ancient Greece Ancient Greece () was a northeastern Mediterranean civilization, existing from the Greek Dark Ages of the 12th–9th centuries BC to the end of classical antiquity (), that comprised a loose collection of culturally and linguistically r ...

, and ancient Rome. Following the unification of the

city-state A city-state is an independent sovereign city which serves as the center of political, economic, and cultural life over its contiguous territory. They have existed in many parts of the world throughout history, including cities such as Rome, ...

s in

Assyria Assyria (Neo-Assyrian cuneiform: , ''māt Aššur'') was a major ancient Mesopotamian civilization that existed as a city-state from the 21st century BC to the 14th century BC and eventually expanded into an empire from the 14th century BC t ...

and

Sumer Sumer () is the earliest known civilization, located in the historical region of southern Mesopotamia (now south-central Iraq), emerging during the Chalcolithic and Early Bronze Age, early Bronze Ages between the sixth and fifth millennium BC. ...

Sargon of Akkad Sargon of Akkad (; ; died 2279 BC), also known as Sargon the Great, was the first ruler of the Akkadian Empire, known for his conquests of the Sumerian city-states in the 24th to 23rd centuries BC.The date of the reign of Sargon is highly unc ...

into a single empire ruled from his home city circa 2334 BC, common Mesopotamian standards for

length Length is a measure of distance. In the International System of Quantities, length is a quantity with Dimension (physical quantity), dimension distance. In most systems of measurement a Base unit (measurement), base unit for length is chosen, ...

area Area is the measure of a region's size on a surface. The area of a plane region or ''plane area'' refers to the area of a shape or planar lamina, while '' surface area'' refers to the area of an open surface or the boundary of a three-di ...

volume Volume is a measure of regions in three-dimensional space. It is often quantified numerically using SI derived units (such as the cubic metre and litre) or by various imperial or US customary units (such as the gallon, quart, cubic inch) ...

weight In science and engineering, the weight of an object is a quantity associated with the gravitational force exerted on the object by other objects in its environment, although there is some variation and debate as to the exact definition. Some sta ...

, and

time Time is the continuous progression of existence that occurs in an apparently irreversible process, irreversible succession from the past, through the present, and into the future. It is a component quantity of various measurements used to sequ ...

used by

artisan An artisan (from , ) is a skilled craft worker who makes or creates material objects partly or entirely by hand. These objects may be functional or strictly decorative, for example furniture, decorative art, sculpture, clothing, food ite ...

guild A guild ( ) is an association of artisans and merchants who oversee the practice of their craft/trade in a particular territory. The earliest types of guild formed as organizations of tradespeople belonging to a professional association. They so ...

s were promulgated by

Naram-Sin of Akkad Naram-Sin, also transcribed Narām-Sîn or Naram-Suen (: '' DNa-ra-am D Sîn'', meaning "Beloved of the Moon God Sîn", the "𒀭" a determinative marking the name of a god; died 2218 BC), was a ruler of the Akkadian Empire, who reigned –22 ...

(c. 2254–2218 BC), Sargon's grandson, including

shekel A shekel or sheqel (; , , plural , ) is an ancient Mesopotamian coin, usually of silver. A shekel was first a unit of weight—very roughly 11 grams (0.35 ozt)—and became currency in ancient Tyre, Carthage and Hasmonean Judea. Name The wo ...

s. ''Codex Hammurabi'' Law 234 (c. 1755–1750 BC) stipulated a 2-shekel

for each 60- gur (300-

bushel A bushel (abbreviation: bsh. or bu.) is an Imperial unit, imperial and United States customary units, US customary unit of volume, based upon an earlier measure of dry capacity. The old bushel was used mostly for agriculture, agricultural pr ...

) vessel constructed in an

employment contract An employment contract or contract of employment is a kind of contract used in labour law to attribute rights and responsibilities between parties to a bargain. The contract is between an "employee" and an "employer". It has arisen out of the old m ...

between a

shipbuilder Shipbuilding is the construction of ships and other Watercraft, floating vessels. In modern times, it normally takes place in a specialized facility known as a shipyard. Shipbuilders, also called shipwrights, follow a specialized occupation th ...

and a

ship-owner A shipowner, ship owner or ship-owner is the owner of a ship. They can be merchant vessels involved in the sea transport, shipping industry or non commercially owned. In the commercial sense of the term, a shipowner is someone who equips and expl ...

. Law 275 stipulated a

ferry A ferry is a boat or ship that transports passengers, and occasionally vehicles and cargo, across a body of water. A small passenger ferry with multiple stops, like those in Venice, Italy, is sometimes referred to as a water taxi or water bus ...

rate of 3-

gerah A gerah () is an ancient Hebrew unit of weight and currency, which, according to the Torah (''Exodus'' 30:13, ''Leviticus'' 27:25, ''Numbers'' 3:47, 18:16), was equivalent to of a standard "sacred" shekel. A gerah is known in Aramaic, and usuall ...

per day on a

charterparty A charterparty (sometimes charter-party) is a maritime contract between a shipowner and a hirer ("charterer") for the hire of either a ship for the carriage of passengers or cargo, or a yacht for leisure. Charterparty is a contract of carria ...

between a ship charterer and a

shipmaster A sea captain, ship's captain, captain, master, or shipmaster, is a high-grade licensed mariner who holds ultimate command and responsibility of a merchant vessel. The captain is responsible for the safe and efficient operation of the ship, inc ...

. Law 276 stipulated a 2-gerah per day

freight rate A freight rate (historically and in ship chartering simply freight) is a price at which a certain cargo is delivered from one point to another. The price depends on the form of the cargo, the mode of transport (truck, ship, train, aircraft), the ...

on a contract of affreightment between a charterer and shipmaster, while Law 277 stipulated a -shekel per day freight rate for a 60-gur vessel.

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 In microeconomics, supply and demand is an economic model of price determination in a Market (economics), market. It postulates that, Ceteris_paribus#Applications, holding all else equal, the unit price for a particular Good (economics), good ...

), labour organisation, legislation, and tradition.

Wage differences

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.

Effects

Corruption

It is known that the wage level of employees in the

public sector The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, pu ...

affects the frequency of corruption, and that higher salary levels for public sector workers help reduce corruption. It has also been shown that countries with smaller wage gaps in the public sector have less corruption.

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 The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

, wages for most workers are set by

market forces In economics, a market is a composition of systems, institutions, procedures, social relations or infrastructures whereby parties engage in exchange. While parties may exchange goods and services by barter, most markets rely on sellers offering ...

, or else by

collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and labour rights, rights for ...

, where a

labor union A trade union (British English) or labor union (American English), often simply referred to as a union, is an organization of workers whose purpose is to maintain or improve the conditions of their employment, such as attaining better wages ...

negotiates on the workers' behalf. The

Fair Labor Standards Act The Fair Labor Standards Act of 1938 (FLSA) is a United States labor law that creates the right to a minimum wage, and " time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits employment of minors in "oppre ...

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

rates that are higher than the federal level. For certain federal or state government contacts, employers must pay the so-called

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 law Minimum wage law is the body of law which prohibits employers from hiring employees or workers for less than a given hourly, daily or monthly minimum wage. More than 90% of all countries have some kind of minimum wage legislation. History Until ...

s require. The minimum wage rate is there to protect the well being of the working class. Living_wage_by_state

In the second quarter of 2022, the total U.S. labor costs grew up 5.2% year over year, the highest growth since the starting point of the serie in 2001.

Definitions

For purposes of federal income tax withholding, 26 U.S.C. § 3401(a) defines the term "wages" specifically for chapter 24 of the

Internal Revenue Code The Internal Revenue Code of 1986 (IRC), is the domestic portion of federal statutory tax law in the United States. It is codified in statute as Title 26 of the United States Code. The IRC is organized topically into subtitles and sections, co ...

: "For purposes of this chapter, the term “wages” means all remuneration (other than fees paid to a public official) for services performed by an

employee Employment is a relationship between two party (law), parties Regulation, regulating the provision of paid Labour (human activity), labour services. Usually based on a employment contract, contract, one party, the employer, which might be a cor ...

for his employer, including the cash value of all remuneration (including benefits) paid in any medium other than cash;" In addition to requiring that the remuneration must be for "services performed by an

for his employer," the definition goes on to list 23 exclusions that must also be applied.USC 26 § 3401(a)

References

External links

*
U.S. Bureau of Labor Statistics

– click Chapter 8

– Different laws by State
Average U.S. farm and non-farm wage

Prices and Wages by Decade library guide
– Prices and Wages research guide at the University of Missouri libraries {{Authority control zh-yue:人工 Wages and salaries National accounts