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 othe ...

to an

employee 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 other ...

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 animal tr ...

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. Most countries had introduced minimum wage legislation by the end of the 20th century. Bec ...

'', ''

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). A number of complementary benefits in addition ...

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 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 ...

paid directly by clients and

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

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 Ancient Economy'' is a book about the economic system of classical antiquity written by the classicist Moses I. Finley. It was originally published in 1973. Finley interprets the economy from 1000 BC to 500 AD sociologically, instead of usi ...

'': :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 ...

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

clock A clock or a timepiece is a device used to measure and indicate time. The clock is one of the oldest human inventions, meeting the need to measure intervals of time shorter than the natural units such as the day, the lunar month and the ...

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 conventionally reckoned as of a day and scientifically reckoned between 3,599 and 3,601 seconds, depending on the speed of Earth's rotation. There are 60 minutes in an hour, and 24 ho ...

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 ( el, Ἑλλάς, Hellás) was a northeastern Mediterranean civilization, existing from the Greek Dark Ages of the 12th–9th centuries BC to the end of classical antiquity ( AD 600), that comprised a loose collection of cult ...

, 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 since the dawn of history, including cities such as ...

s in

Assyria Assyria (Neo-Assyrian cuneiform: , romanized: ''māt Aššur''; syc, ܐܬܘܪ, ʾāthor) was a major ancient Mesopotamian civilization which existed as a city-state at times controlling regional territories in the indigenous lands of the A ...

and

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

Sargon of Akkad Sargon of Akkad (; akk, ''Šarrugi''), 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 highl ...

into a

single empire Single may refer to: Arts, entertainment, and media * Single (music), a song release Songs * "Single" (Natasha Bedingfield song), 2004 * "Single" (New Kids on the Block and Ne-Yo song), 2008 * "Single" (William Wei song), 2016 * "Single", by ...

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 distance. In most systems of measurement a base unit for length is chosen, from which all other units are derived. In the Interna ...

area Area is the quantity that expresses the extent of a region on the plane or on a curved surface. The area of a plane region or ''plane area'' refers to the area of a shape A shape or figure is a graphics, graphical representation of an obje ...

volume Volume is a measure of occupied 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). The de ...

weight In science and engineering, the weight of an object is the force acting on the object due to gravity. Some standard textbooks define weight as a Euclidean vector, vector quantity, the gravitational force acting on the object. Others define weigh ...

, and

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

used by

artisan An artisan (from french: artisan, it, artigiano) 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 ...

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

s were promulgated by

Naram-Sin of Akkad Naram-Sin, also transcribed Narām-Sîn or Naram-Suen ( akk, : '' DNa-ra-am D Sîn'', meaning "Beloved of the Moon God Sîn", the "𒀭" being a silent honorific for "Divine"), was a ruler of the Akkadian Empire, who reigned c. 2254–2218 BC ...

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

shekel Shekel or sheqel ( akk, 𒅆𒅗𒇻 ''šiqlu'' or ''siqlu,'' he, שקל, plural he, שקלים or shekels, Phoenician: ) is an ancient Mesopotamian coin, usually of silver. A shekel was first a unit of weight—very roughly —and became c ...

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 and US customary unit of volume based upon an earlier measure of dry capacity. The old bushel is equal to 2 kennings (obsolete), 4 pecks, or 8 dry gallons, and was used mostly for agricult ...

) 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 ...

between a

shipbuilder Shipbuilding is the construction of ships and other floating vessels. It normally takes place in a specialized facility known as a shipyard. Shipbuilders, also called shipwrights, follow a specialized occupation that traces its roots to befor ...

and a

ship-owner A ship-owner is the owner of a merchant vessel (commercial ship) and is involved in the shipping industry. In the commercial sense of the term, a shipowner is someone who equips and exploits a ship, usually for delivering cargo at a certain freig ...

. Law 275 stipulated a

ferry A ferry is a ship, watercraft or amphibious vehicle used to carry passengers, and sometimes vehicles and cargo, across a body of water. A passenger ferry with many stops, such as in Venice, Italy, is sometimes called a water bus or water taxi ...

rate Rate or rates may refer to: Finance * Rates (tax), a type of taxation system in the United Kingdom used to fund local government * Exchange rate, rate at which one currency will be exchanged for another Mathematics and science * Rate (mathema ...

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 usually ...

per day on a

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

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.Aragon and Messner, 2001, p.3. The captain is responsible for the safe and efficie ...

. 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 w ...

on a

contract of affreightment Affreightment (from freight) is a legal term relating to shipping. A ''contract of affreightment'' is a contract between a ''ship-owner'' and a charterer, in which the ship-owner agrees to carry goods for the charterer in the ship, ''or'' to giv ...

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, holding all else equal, in a perfect competition, competitive market, the unit price for a ...

), labour organisation, legislation, and tradition. Market forces are perhaps more dominant in the

United States The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...

, while tradition,

social structure In the social sciences, social structure is the aggregate of patterned social arrangements in society that are both emergent from and determinant of the actions of individuals. Likewise, society is believed to be grouped into structurally rel ...

and

seniority Seniority is the state of being older or placed in a higher position of status relative to another individual, group, or organization. For example, one employee may be senior to another either by role or rank (such as a CEO vice a manager), or by ...

, perhaps play a greater role in

Japan Japan ( ja, 日本, or , and formally , ''Nihonkoku'') is an island country in East Asia. It is situated in the northwest Pacific Ocean, and is bordered on the west by the Sea of Japan, while extending from the Sea of Okhotsk in the north ...

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 The Bureau of Labor Statistics (BLS) is a unit of the United States Department of Labor. It is the principal fact-finding agency for the U.S. government in the broad field of labor economics and statistics and serves as a principal agency of th ...

, 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.

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

, 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 rights for workers. The i ...

, where a

labor union A trade union (labor union in American English), often simply referred to as a union, is an organization of workers intent on "maintaining or improving the conditions of their employment", ch. I such as attaining better wages and benefits ( ...

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 "oppres ...

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 r ...

s require. The minimum wage rate is there to protect the well being of the working class. 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 (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 ...

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

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